Buying a house is a major investment decision and one you will have to live with for a significant part of your life. It is, therefore, a decision that should not be rushed. Not only is it a big commitment, but it is not always a good investment. Homeownership can be a smart long-term move; however, only if it is approached the right way.
Here are the things to know before purchasing a home in 2020 that will help with everything from finding the perfect house to making the mortgage process easier.
Research is Important
Before you make an offer on any house, be sure to do some research on the local market. Monitor the condition of the housing market in the neighbourhood you are interested in.
Also, take careful note of how long properties within your budget stay on the market and if there are any major changes in the sales price. Consider working with a local realtor if you would like some help with understanding these major data points.
Evaluate the State of your Finances
Until you understand what you can afford based on the state of your finance, buying a home will come across as a pipe dream. Therefore, closely monitor your credit score and make improvements where you can. Getting pre-approved for a loan is easier when you have a great credit score.
You should also ascertain how much you have available for a down payment. On average, you will be expected to make a down payment of between 5 and 20% of the asking price on any property.
Get Pre-approved for Loans Before Making an Offer
Getting pre-approved for a home loan is one of the smartest things you can do during the home buying journey. Why? You might be able to estimate what your house shopping budget should be based on credit score and your finances, but speaking with a lender will help you narrow down a specific number.
Pre-approval also demonstrates to sellers the seriousness of your intent. It also means you can close a deal more quickly. However, please note, in order to get pre-approval for a mortgage, you will be required to provide your lender with some sensitive financial information such as your assets and your debts.
Determine your Deal Breakers
After you have determined how much you can spend on a house, and before beginning your search, it is a good idea to draw up a list of all the amenities you want in your new home. Would you like a fireplace? A view of the park?
Separate your preferences by the absolute ‘must-haves’ and the ‘can do without’. Even though the probability of finding everything on your list is very slim, having a list of priorities will help you get the best deals.