5 Things Buyers Wish They Knew Before Purchasing a Home
While there are many things to consider when buying a home, especially your first home, here are 5 topics that are often overlooked.
1. How a loan works
I think most people understand the basics of a mortgage. It’s money that you borrow to purchase a home, where the lender holds the home as collateral. But considering it’s most likely the largest loan you’ll ever take out for your biggest asset, it’s important to know the ins and outs. I find it’s helpful to really break down how much the loan will cost. For example, a 30 year fixed 3% loan of $400,000 will require a total of over $607,000 in payments. That’s over $200,000 in interest! There are other things you should know as well, like the policies regarding paying down the mortgage early. The more you know, the better you’ll feel about the decisions you’ve made.
2. Budgeting for additional costs
In order to make the home buying process as smooth as possible, you’ll want to prepare for everything in advance. Expect the unexpected, and you’ll be fine. You’ll need to consider the typical closing costs, like lender’s fees, property taxes, underwriting fee. But don’t forget to budget for an inspection, if you need to break a lease or need to hire movers. You’ll be better off budgeting for extra and having unused funds than having to deal with unexpected expenses.
3. What to look for in a lender
There’s no reason to not shop around for a mortgage. Sometimes people forget that the mortgage is actually a product, and you should look around just as you would for any large purchase. Along with finding a good rate, with reasonable closing costs, it’s important to find a lender who’s easy for you to communicate with, receptive to your needs and flexible.
4. Inspection will find problems
And there’s not necessarily something wrong with that! Virtually no home is perfect, unless it’s new construction by the best builders. Unless there’s a major defect like a crack in the foundation or widespread mold, don’t freak out. It’s not worth losing a house you loved because of an issue that’s just general wear and tear or an easy fix.
5. Yards require work
If you’re buying in a condo building, this won’t be too relevant. Any good homeowners association will have taken care of the landscaping. For a single family home though, unless you’re going to hire someone, you should think about getting a lawn mower. Be prepared for seasonal clean ups, re-mulching and even tree removal, if applicable.
If you’re looking to buy a home, let me help you prepare. You can reach me by phone at 617 528 8461 or email at willy.charleton@nemoves.com.