Courtesy of Indianapolis Real Estate Listings
In the current real estate market, many people are taking advantage of low home prices and lower interest rates to become property owners. When you compare the cost of renting versus buying, it makes perfect sense for many. So how can you best prepare for buying your first home?
Here’s a few guidelines:
1. Know Your Purchasing Power
Many begin their home search online and ultimately come across the perfect home. They make an appointment to view the property and decide it’s just perfect. They have run all the numbers on a mortgage calculator and accordingly, believe they are looking in the right price point and can put in an offer…and that’s when all the surprises begin…
Nine times out of Ten, there is no financing in place and they have to go out and shop for a mortgage. Often, this creates tensions as the final numbers don’t look exactly as hoped for. It is always best to speak with a lender and know your purchasing power before you start looking at homes, this way there won’t be many disappointments.
2. Additional Costs of Buying a Home
There are some specific costs of buying a home. Many first time home buyers simply don’t know about or consider these when using online mortgage calculators. Here’s a few that may or may not apply to your particular situation:
- On an FHA loan, mortgage insurance has an upfront fee, which can be financed into the loan, therefore, making the loan balance higher as well as the monthly payment.
- On both a conventional loan and FHA, there will be monthly payments for property mortgage insurance, as well.
- Closings costs include loan costs, lender’s title insurance, first year’s homeowners insurance, escrow accounts, appraisal and other miscellaneous fees.
- Home Inspection is another cost you will incur upfront
3. Choose the Best Neighborhood you Can Afford
In real estate, they say it’s all about location, location, location. It is wise advice to choose an area first or a couple areas of town, then narrow your search to properties in the area within your price range. It is also smart advice to choose a smaller home in good condition, than a larger home that needs lots of work.
4. Hire an Independent Inspector
From energy efficient windows to different types of plumbing systems, researching and certifying the materials that make up a potential new home should be a priority for all buyers. A professional home inspector can help buyers identify the strengths and weaknesses of a given home, and offer tips on how to improve any problem areas.
5. Hire a REALTOR®.
Even with the enormous amount of information available online, all real estate is local. A REALTOR® can truly assist you in determining fair market value, therefore protecting your interest and your finances. A good, competent REALTOR® with experience assisting home buyers can also be a wealth of knowledge about loan programs and financing options available.
Happy Shopping!
You may view recent listings at Homes for Sale Indianapolis