There comes a time in most people’s lives when buying a home comes to mind. There comes a time in most people’s lives when insomnia starts to set in. These two things happen at the same time. For sure, the very thought of buying a home makes the mind swirl like a Flav-R-Burst cone, and who can sleep with those questions on the mind? Interest rates, down payment, upkeep, VA, FHA, property taxes, square footage, ARGGGHHH, it’s too much! It is because you haven’t consulted your friends here. Read on, for your Money Examiners homebuyers checklist. Much of what we found is most-applicable to first-time buyers, but old pros can also learn something.
Know your timeline, meaning how long do you plan on living in the home you buy. Experts say at least five years is the right answer. Initially, your mortgage payments are paying down the interest, instead of the principal. There’s no equity in that. Staying 60 months or less? Renting may be your best option, unless you’re after the tax deduction from buying a home.
Plan your living space for the amount of time listed above. Even if there are only 1-2 members of the household now, project for kids, pets, and hobby space.
How much are you prepared to put down? In spite of what you may have heard, 20% is still the industry standard. A smaller down payment results in mortgage insurance as a part of the deal. It is expensive! Homebuyers who pay 20% down reap the benefits of homeownership.
How much can you afford? Mortgages last 15, 20, or 30 years, and you should choose the one that will allow you to keep as much of your money as possible. Millennials should choose a long-term loan, and stay flexible for upkeep, repairs, and improvements.
Do you want to use a Realtor, or go it alone? This one is easy. If this is your first rodeo, you want to use a Realtor. If it isn’t your first rodeo, you probably still want to use a Realtor. This is, perhaps the most important lesson in your Money Examiners home buyers checklist.
Location (you know the rest). Yes, it is a cliche. But, that’s because there is a ton of truth to it. From school districts to commute time to things you enjoy being close by, location is paramount. It has much to do with your eventual resale value, as well.
Is a little TLC okay with you? If so, consider a fixer-upper. A few weekends and a little elbow grease will have that house ready for callers.
Take the home inspection seriously. In fact, be there for it! Cosmetic issues you can see for yourself, but the inspector will find the hard-to-spot problems.
Are you ready to make an offer? Do all of the communicating through your realtor. There will be some back and forth and give and take. This is normal, and not to be navigated in a strongly competitive environment.
Does this sound like a lot? Read through your Money Examiners homebuyers checklist one more time. Take it one step at a time and it won’t seem so bad. The whole process may take six months or more but look at it this way. How many years has it taken thus far? Enjoy your new home. Money Examiners would love to come to the first barbecue you have.