5 Truths About Buying a Home
Contributions done by: Mikayla Orser & JW Rayhons
What is the truth about home buying? How do we “get the most for our money”? Is there a secret to home buying? The truth about home buying is that everyone will need to do some research to find the best fit for them. With knowledge at our fingertips there is very little “secret” information out there, especially about home buying. However, there are some truths that everyone should consider when it comes to buying a home.
1. Buy the house you can afford
If you choose to use a loan to pay for your home, then you will most likely go through a pre-qualification process. You will receive an amount that you are qualified for based on your credit score. Hoffower mentions that you should “buy the house you can afford, not the maximum the mortgage company thinks you can afford” (2018).
2. Consider other expenses
Your new home will consist of more than just a mortgage payment. You will need to consider homeowners insurance, a home warranty, HOA fees, property taxes, and repair/replacement costs. These expenses may be greater than you anticipate, or than you have budgeted for every month. It’s also good to remember that when buying a home, you will have realtor fees, a down payment, and closing costs. These costs are negotiable with the sellers, but they will be important when buying a home.
3. 20% down?
Putting 20% down on your new home is preferred, but it is not necessary. There are loans, such as a conventional loan, that allow you to put 3% of the home’s value down. However, you may have a higher interest rate as compared to those who put 20% down.
4. Shop for your mortgage
One great way to realize substantial savings is taking time to find the best mortgage product (REBAC Staff, 2016). Mortgage rates change daily; mortgage companies, banks, and other lending institutions have different offers. You should do research by reviewing, calling, and going to different lenders to find out who can offer you the best rate or contract. Instead of using a mortgage lender that was recommended to you, it may serve you well to shop around for a lender.
5. Look for a good school district
Although you may not have children, or have plans to have children, the school district where your home is located does affect the value of the home. Living in a desired school district will help the resale value of the home (HGTV, 2019). Hoffower reiterates this point, she says “…buying a home in a top-notch school district will bode well in the long run come resell time.” (2018).
Being a new home buyer, or a seasoned home buyer, it’s still important to remember these simple truths when it comes to buying a home. Furthermore, continually doing research will add the greatest value to your home buying experience.
If you are looking for a financial advisor team focused on your unique financial situation, communicates openly, and that puts you and your goals at the center of the relationship, call us at (480) 507-2425 or contact us online. We’d love to meet you.
Mikayla Orser is a Non-Registered Associated Person with Voya Financial Advisors. Mikayla cannot offer securities or advisory services.
The content in this article was prepared by the article’s author. Voya Financial Advisors, Inc. does not endorse its content, and the views expressed may not necessarily reflect those held by Voya Financial Advisors, Inc.
HGTV. 2019. 23 Things Every First-Time Homebuyer Should Know. https://www.hgtv.com/lifestyle/real-estate/23-things-every-first-time-homebuyer-should-know
Hoffower, H. 2018 July 6. 10 hard truths no one tells you about buying a house. Business Insider. https://www.businessinsider.com/10-secrets-no-one-tells-you-about-buying-a-home-before-you-sign-2018-2
REBAC Staff. 2016 September 26. Need a Mortgage? Why and How Should You Shop Around. Real Estate Buyers Association Council. https://homebuying.realtor/content/need-mortgage-why-and-how-you-should-shop-around