In previous posts, we’ve offered some solid tips for first-time home buyers: Ten Tips for First-Time Home Buyers and Ready to buy your first home? What will the bank say? If you’re home buying for the first time, here are a few more things to think about:
Don’t forget closing costs.
As a buyer, you’ll hear a lot about budgeting for your down payment, and that’s very good advice. Depending on your loan program, your down payment may be the single largest sum you put out for your purchase. But your budget should also account for the costs of closing. Those typically included home inspections, title insurance, homeowners insurance, and other fees. Budget between 2% and 5% of your loan amount.
Budget for your move and what comes after.
First-time home buyers sometimes get so excited about their new home that they overlook little details, such as, “Oops, there’s no refrigerator,” or “We don’t have a table!” If you’re moving from a rental property, you may not be bringing your own appliances, and may have to purchase new ones. If you’re bringing furniture, you may need a mover. Plus, you may need to make repairs or paint (inside or out) before you get settled. Get some estimates on those costs and build them (and a little extra) into your budget.
Don’t be pressured into making a hasty decision.
Home buying can feel urgent for everyone involved. There may be very real pressures on you as a buyer—to move out of your current home, to find a new place before the baby is born, to get settled before you start your new job, and so on. You may feel everyone is hurrying you along. Your close friends may encourage you to buy a house you’re just not sure about because it’s close to them. You may be dazzled by some feature of the property that distracts you from noticing its problems. You may be urged to get into a “bidding war” for the home you want, at the risk of going over budget. Take the time you need to discuss your options and make decisions you’ll be happy with now and in the long term.
Consider the neighborhood.
There are a couple of considerations that can have a long-range effect on the value of your home. One is the schools in the area; the other is planned construction. In most cases, the better the schools, the stronger the resale value of homes in that neighborhood. Explore the track record and reputation of the local K-12 schools before you buy, even if you don’t have children. It’s also worthwhile to check with the local planning agency to see if major construction is slated for the neighborhood: street widening, freeways, zoning changes, urban village development, commercial construction, etc. Even if you are comfortable with those changes, you want to avoid surprises.
Pay attention to the details.
We’ve said this before, and there are plenty of details you will need to consider before you close your home purchase. But here are two more important ones: 1) check the property lines and 2) examine the title. If your new home is in an urban or suburban neighborhood, the local planning department should have a document on file that shows your home’s property lines. Over time, property lines can be obscured by trees, fences, hedges, driveways, and casual agreements between neighbors. Make sure you know where the line is and how it might affect your use of the property. One of the final steps in securing your purchase will be a policy of title insurance. The title company should examine the entire ownership history of the property to make sure there are no liens or questionable transfers that would become a blotch on your purchase. Examine the title document, ask questions, and make sure your home will really be your home.
Looking for more information on purchasing your first home? Our First-time Home Buyers Guide will give you even more guidance to navigate the process.
When you are ready to talk about buying a home, the loan officers at Sente Mortgage will be happy to provide detailed information about your borrowing options. Give us a call.