8 Tips for Buying a House

These last few months have been crazy! My hubby and I have been house hunting and let me tell you, it is no easy feat! There are so many things to consider when making what could possibly be the largest purchase of your life...and it can be very stressful. When we first sat down with a mortgage broker, we had this "we got this" attitude about the home buying process, but we quickly got a reality check once we started. There were times we left the bank with our heads spinning! Ahh! Sleepless nights, loss of appetite, and hours of research later, we are getting closer to the end result...obtaining our dream house!

So, since I have been going through all of this recently, I figured I would write an article about some of the things I have learned during this process, perhaps sparing you a bit of the stress when you are house hunting. It is now spring time. A time when the housing market becomes flooded with new listings! This is a popular time of year for people to buy and sell. Many of you may be in the market to purchase a house. Whether you are first time home buyers or have been through the process before, there is no doubt, you will have a lot to do!

First thing before we really get into the meat of it, just take a deep breath. House hunting and buying is stressful, but you can make it less stressful by being prepared, staying calm, and staying level-headed. Purchasing a home is different for everyone. Are you buying a house with your spouse? Or alone? Do you have children that require a certain school district or number of bedrooms? Is there something specific your home must have? Maybe you require a home office or a room for guests to stay in if you often have visitors? All these different factors will play a huge role in your own personal home buying process.

So, let's start with tip number one...

1. Create a list of must-haves, wants, and would-likes. If a specific location is a must, make sure that is right at the top of your list. If you really enjoy cooking, perhaps a kitchen equipped with stainless steel appliances and granite counter tops is something you would really like your home to have. Perhaps large walk-in closets would make you swoon? But is it a deal breaker if you find a great house that does not have walk-ins? Make sure you carefully consider wants and needs. If you are making your home purchase with a spouse, you might not agree 100% on every aspect of your needs and wants. Be prepared to compromise. You may have to let go of something you wanted. That is not the end of the world. Talk through your options and keep communication open with your spouse during the entire process.
2. Know your credit score. This can be a huge factor in getting approved for a mortgage. Most likely, you will find anything below a 640 is going to cause you trouble getting approved for one. Everyone would love a credit score of 850, but we know in this world of student loans and credit cards, most of us do not hit so high on the score board. Shoot for a 700. Realistically, this score is obtainable and will almost insure you can get approved. In some cases a better credit score will be a factor in your interest rate and the down payment required.
3. Get Pre-Qualified for a mortgage. The first thing you should do is go to a bank and see if you can get pre-qualified for a mortgage. If you get a pre-qualification, they will give you an amount they determined you would be approved for. I will tell you though, this is not a guarantee of a mortgage. However, a pre-qualification is the starting point for the process, and gives you a good idea of what price range you should look at. Don't dream about that perfect house, getting your hopes up and heart set on it, only to find you won't qualify for a mortgage for it. Knowing your price range first can save you a lot of unnecessary stress.
4. Create a budget. You might want the moon and the stars...but what can you really afford? Comfortably? Without making yourself house-broke? Keep in mind that when you buy a home, other expenses come along with it, aside from the mortgage. Will you have to purchase any appliances? How about furniture? Are you going to hire a moving company or a U-Haul truck? These things can quickly add up so make sure you give yourself a little wiggle room.  
5. Closing costs can hit souring amounts. I did not realize the cost of closing on a home until we actually got into the process. It can get expensive! Very expensive. Talk to the bank you are working with and get a soft quote on the expenses. A lot of the cost will depend on the type of loan you are going with. Some require 5% down, where others can be 20%. Other factors are what the lawyer fees are, the home's property taxes, and so on. The one thing that was news to me was that the first year's property tax needs to be paid up front. I always heard the taxes were rolled into the mortgage, which is true, after the first year. So, for example, if the home you want has annual property taxes of $3,000...you will need that 3k up front in cash, on top of everything else. Start saving!
6. Find a good realtor to work with. Just like in any field, there are people good at their jobs and others that are, umm, not so much. Talk to others in your area that have been through the process. Often times word of mouth is the best way to find a really good realtor. Once you find one you feel comfortable with, and let them know everything you are looking for and what your price range is. They will be able to help you find contenders and set up showings. You want someone who will work for you and with you!
7. Once you start touring homes that you are interested in, go in with your eyes and mind open. Take it all in. Inside and out. If a home is currently lived in, try not to focus on the current owner's furniture or decorations. Those things are not staying with the home. Look past them. Try to envision the rooms empty or with your own touches in it. Look at the major points...The layout, the condition of walls, windows, floors, foundation, and roof. Ask a lot of questions. How old is the roof? What sort of heating and/or cooling system does the home have? Does it have well water or a septic tank? Is the home in a flood zone that will require you to carry flood insurance?
8. Once you decided on a house, made an offer and the offer was accepted; having a home inspection done is a great idea. Make sure you include it when you make an offer; simply stating that it is contingent on the home passing an inspection. This will cost you approx. 300-600 dollars, but is well worth it. This professional home inspector will look for any major problems in the home. Often times if something is found, for example the home needs a new roof, the home owners can be asked to make the repair before the sale goes through, or you can use it to lower the selling price and have the work done yourself. If worse comes to worse, it gives you the option to walk away from the deal. If a home has many unseen issues, a bad foundation, termites, leaks, etc...it could have just saved you from buying the biggest problem of your life!

Take your time (if possible) and make sure you feel comfortable with your end decision. Whether you plan to live in the home the rest of your life or just a few years, it is going to be a major part of your life. I hope these tips can help you to make a wise decision and ease the tension of the process.

Please feel free to share any additional tips or tell us a personal experience you had :)

Happy House Hunting!