For new house hunters, the home-buying process can be overwhelming and difficult to navigate. Finding the right house depends on your budget, needs, wants, and life phase. The following tips from Realty Executives can help you determine if your next move should be into a starter home or something more permanent.
Understanding Your Housing Options
Fixer-uppers are a great choice for first-time buyers or those who don’t intend to stay in a given region for very long, especially as things become increasingly expensive with little relief in sight. These houses typically cost considerably less than more established homes in terms of mortgages, down payments, taxes, insurance, and other fees. The tradeoffs to this include a lack of space and lower resale value than a “nicer” home, as well as usually being sold as-is, often requiring considerable repairs and remodeling before the property is to your liking.
A larger, pricier home is better for people ready to settle in and establish their roots. These houses tend to be more expensive in every way, especially considering property tax appraisals, but the benefits outweigh these negatives if you can fit such a home into your budget. Forever homes likely have more space to support large gatherings and sprawling families, allowing you to pass the house on to loved ones and establish a legacy. These houses are usually sold in better condition than a less expensive starter home, though more land and nicer amenities mean more frequent and costlier upkeep.
Your budget and future life plans are important aspects to consider when deciding which type of home to purchase. Starter homes are more affordable overall and typically require a lower down payment. Depending on several factors, required down payments can range from 3.5% of your total loan up to 20% of the mortgage according to TheStreet. Assess what you can afford to spend on your down payment and how much a given home is likely to require.
Researching the Red Tape, From the Mortgage to a Home Warranty
When you apply for your home loan, lenders will look at your financial health to determine how much money they’re willing to lend you. Metro Mortgage notes that values such as your debt-to-income ratio, credit score, and current job are assessed to decide how large of a loan you can reasonably pay back and how much you’ll need to put down to start. Longer loans tend to have smaller monthly payments while giving more per month can reduce the duration of your mortgage considerably.
Some often-forgotten expenses associated with home buying are homeowner’s insurance and home warranties. Insurance provides you with money in the event your property is damaged, vandalized, or stolen. A home warranty supplements the manufacturer’s warranty on household appliances, helping to facilitate repairs and routine maintenance without paying too much out of pocket. Before selecting a policy, search around online to clarify the difference between home warranty vs. manufacturer’s warranty, and look into the different options for home warranty companies available to you.
Depending on how much actual money is left in your budget after the process, you might consider hiring a moving company to handle the literal labor of the move. Professional movers are normally trained and insured, guaranteeing any losses or damage that occur on the job will be replaced, repaired, or compensated. Perform some detailed research into the companies in your area to find the most reputable and cost-effective movers at your disposal.
Whether you’re starting or ending your series of homes, finding the most pragmatic option is essential. Consider the needs of yourself and your family, as well as your financial health and capabilities when deciding what type of house is best for you. Remember to understand your housing options, research mortgages and home warranties, and hire professional movers.
For over 57 years, Realty Executives agents have excelled at helping buyers and sellers through every step of their real estate transaction. Find an agent today!
