Here’s What You Need to Ask Before Buying a House
Even if a house sounds like a real deal, there are some things you need to know before signing the agreement. Answering these questions before can save you from a lot of headaches later on. Not to mention they may save you from potential financial problems.
How much house can you afford?
Before looking at any houses, you need to know how much is in your housing budget. Remember that lenders may give you a mortgage for more than you can afford. It is up to you to make this decision first. You should not take a mortgage that is more than 25% of your monthly income.
What size down payment can you afford?
A mortgage is always cheaper if you can put down anywhere between 10 to 20% of the cost. You can avoid having to pay Private Mortgage Insurance (PMI) if you can pay 20% or more. This will also lower your loan payment size and lenders will be more willing to give you a loan.
Will your income change soon?
If you are younger buying a house larger than your immediate needs may be a good choice. However, if your income is unstable or you plan on getting ready for retirement, a smaller home can be better.
What are your long-term needs?
Homes come in all sizes, but you likely only need a particular size. Decide if you are looking for a permanent home or a temporary one – hoping to upsize later. Remember that you will need to keep it clean. If you are looking to retire in your new home, you may want to get a rancher style home so that you can minimize having to climb stairs. If you are looking for a place where all of your children’s families can meet, it will need to be larger.
Can you afford the maintenance?
Houses develop problems and need some degree of repair and upkeep from time to time. You may also want to remodel some rooms after you move in or before. Can you afford a new roof, heating unit, windows, plumbing problems, new carpeting, etc.? Don’t forget about taking care of your yard, too, which may include taking care of your lawn, landscaping, trees, and more.
What problems does the house have?
You also need to get the house you want to buy inspected. The owner may not be telling you the whole story. An inspection will help you understand the condition of the house and property, including the HVAC unit or furnace, the roof, mold or termite issues, etc.. Once an inspection has been completed by the inspector of your choice, you can have confidence that there will not be any surprises after settlement.
What’s included in the purchase?
Find out if things like appliances are going to be included in the sale. If they will stay, they will be included in the price, but if you do not want them, you should be able to have them taken off the total cost.
What is the cost of similar homes?
Just to be sure you are getting a good deal, take time to discover what a similar size home in that neighborhood is selling for or has recently sold for. A real estate agent can best help you with this information by giving you a competitive market analysis (CMA).