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Positioning Yourself to Buy a Home in 2021

Positioning Yourself to Buy a Home in 2021

Thursday, March 25, 2021/Categories: Bank News, Saving & Planning

Spring is finally here and many people start thinking about moving or buying a new home. Buying a home is one of the most important financial decisions a person can make, but you don’t need to be a real estate tycoon to make an informed decision. From figuring out pricing and finding a reliable lender, to assessing your own personal circumstances, here are 5 things you should know before purchasing a home.

Finding the Right Realtor

Everybody knows that a realtor takes a cut of the house’s sale price, which can make some buyers reluctant to even use a realtor. However, it should be noted that the realtor charges their commission from the seller, not from the buyer. One should also keep in mind that the listing agent (the agent representing the seller) won’t protect your interests, and can in fact pocket both sides of the commission, driving up your price as a result. A savvy realtor who works for you can protect your interests, make insightful suggestions from their knowledge of the area, and make sure that you are getting a good price on your future home. An advocate in your corner is well worth the cost when considering how big a decision it is to buy a home. 

Look Beyond the Buying Price

Buying a home is a costly investment, but it’s important for future homeowners to bear in mind that a house’s price may actually go far beyond its listed value. Often, things will need to be repaired or replaced, and the costs of the needed materials and renovation services will come right out of the buyer’s pocket. These secondary costs are crucial to keep in mind when trying to find what house is the best fit for your needs.

Know What You Can Afford and How Much You Can Borrow

It is crucial to understand the state of your finances before making such an important decision. One should always consider their credit score and the interest rate that their score will allow them to receive, as well as any student loan debt one might have. As a rule, you should typically be prepared to allocate anywhere between 28% and 30% of your income for annual hanging costs that come with home ownership, including mortgage, insurance, and taxes. You can run the numbers for yourself using financial calculators to gauge how much home you can afford and what your payment will be.

Finding a reputable mortgage lender is a very important step in buying a home. Before you even start looking, you should apply for mortgage preapproval with at least a few different lenders so that you can compare and contrast the terms of their preapproval letters and find the best deal for you. If you don’t know where to begin, our home mortgage team can provide you with all sorts of useful information to help you get started.

Think About Commitments

While one’s finances are crucial to consider before purchasing a home, it is just as important to assess how your personal commitments can impact your investment down the road. When you get married, a state’s laws generally determine how your assets are treated and distributed if a divorce happens to take place down the road. The same rules don’t necessarily apply when you’re not married. When you buy a home with an individual who is not your spouse, it is important to consider exit strategies if things don’t go the way you hope. It’s a good idea to have a written agreement in place with respect to titling, payments, and who is fiscally responsible for repairs and other hidden costs.

What Personal Needs Does Your Home Have to Meet?

At the end of the day, if a home doesn’t have what you’re looking for, then it might not be the home for you. You  should consider the needs of your family when looking for a location to settle in. It is important to think about things like how close your home is to good schools, whether or not you have a homeowners association to pay fees towards, or whether the town or neighborhood seems like a good fit for you before making such an important life decision.

Homeownership has many benefits and provides the place for your family to make many memories. However, it’s important to go into it with a solid knowledge base. Happy house hunting!