Buying a house is a common dream. However, going through the home-buying process is an experience that demands a significant amount of energy. Choosing the right home implies, among others, budget, size, location, and neighborhood.
How to know if you are getting the right place? Through this post found some tips that may help you choose the house of your dreams.
When choosing the right house, Budget and size are possibly the primary factors to consider.
Size should be based on the number of people who will be living in the house as well as any future expansion plans. The layout should be designed with both function and aesthetics in mind. Neighboring properties can also affect the decision, so it is essential to know what they are like before making a final decision.
Depending on your financial situation, you can estimate how much you can put down and your monthly mortgage payments. Setting a realistic budget is the first step toward getting prepared to own a house.
When you become a homeowner, there are one-time expenses, the down payment, and closing costs. In addition, you will have three fixed monthly fees: the mortgage, insurance, and property taxes. Maintenance and homeowners’ association are also variables that should be included when you calculate your budget.
Banks and lenders want to make sure you can pay your loan. Experts recommend taking your accounts and credits against your income; this way; you can elaborate an accurate analysis to identify unnecessary expenses. To roughly estimate an affordable price range for a home, multiply your annual gross income (what you earn before taxes) by 2.5.
Your credit score and mortgage rates have a significant relationship, which will play an essential role in your budget.
Size of The House
As we mentioned before, home size should be based on the number of people living in the house and any future expansion plans. The layout should design with both function and aesthetics in mind. Neighboring properties can also affect the decision, so it is important to know what they are like before making a final decision.
Space would be best if you had it in mind before you started looking. It is not just square footage. You want to ensure the house has the correct number of rooms and no wasted space. For example, you may not need a formal dining room, but you may prefer to have a media room where you can put recliners.
If you have a big family or work from home, you may need a space where your children can study or a home office where you can concentrate on your activities.
Size and budget go hand in hand. It depends on your necessities and income; you will select the size of home you want; this takes us to the next point in this post, which is the neighborhood.
People often get so focused on the actual house that they forget about the neighborhood. If you have children, you’ll want to ensure you’re in a good school district. You should also research the neighborhood’s services, shopping areas, access to freeways, main roads, and community interests.
Your realtor will also be able to help guide you through this process, so make sure you find someone you trust. It is a good practice to visit the neighborhood you want to get in; touring it at different times and days of the week can give you a better idea about the area’s quality.
Your family’s safety is your primary priority. Knowing the area, you want to live will help determine if the neighborhood is safe. There are several ways to assess neighborhood crimes before you move in. Crime tracking websites are usually pulled from local police and police records. However, departments in some locations do not release this information publicly, so you may need to contact them directly. You can also check online for current data on what’s happening in your neighborhoods of interest:
The National Sex Offender Public Website (NSOPW) is the only online tool that provides current data on sex offenders from all 50 states.
The Family Watchdog online tool provides information about sex offenders nationwide. By entering your state and zip code, you will access the information about sex offenders in your area.
The CrimeReport and SpotCrime are also websites where you can get information about the safety in the area you want to live in.
Schools In The Area
Choosing a neighborhood with a good school district is essential for the children’s education. Online you can find information about the school districts nationwide. When a family has elementary and junior school children is crucial to know the quality of the schools in the area. Cities with blue ribbon schools will likely have a good college on their perimeter. If you plan to buy a property to raise a family, include in your search all grades schools.
Visit the City Hall of the city your plan to live. Check the recreational programs the city has for children and adults.
Easy Access to Amenities
Freeway access is one of the first things many homebuyers consider. Living close to a freeway can make commuting more accessible and provide quick access to other parts of the city. However, it’s essential to consider the downside of living near a freeway as well. Freeways can be noisy, and the traffic can generate air pollution. If you’re looking for a quiet suburban lifestyle, a home near a freeway might not be the best choice.
Another critical consideration is proximity to amenities like supermarkets, libraries, community centers, and shops. It can be inconvenient if you have to drive several miles just to buy groceries or borrow a book from the library. On the other hand, living close to these amenities can make your life more convenient and enjoyable. When choosing a new home, take some time to consider your needs and preferences, so you can find a property that’s just right for you.
Once you have selected the area where you want your home, don’t hesitate to visit open houses and never stop looking for a suitable property. Go to the schools, talk to the teachers, and see the community center, the library, and the sports fields to get informed about the physical activities for kids and adults.
Intuition is “the power or faculty of attaining direct knowledge or cognition without evident rational thought and inference.” Merriam-Webster.
If you found a house that fulfills your dreams, but an uncomfortable butterfly feeling invades your body, it may not be for you. Sometimes the house looks nice, the paint is beautiful, and the kitchen is functional, but when you’re outside looking at the neighborhood, a strange feeling won’t let you go. It is better to pay attention to the call of the guts. That house is not for you.
On the contrary, if you feel comfortable and can picture yourself living in the house and walking for its surrenders, you are in the right home.
During a home visit, many buyers can put the furniture in their imagination. They can see the family around the kitchen and the kids playing in the backyard; this is a clear indication that your conciseness recognizes that structure as your house.
Intuition can help you as complementary to the advice given by your realtor and your search about the neighborhood to decide if you are about to buy the house of your dreams.
The Home Mortgage Loan
If you have the cash to buy your home, you don’t need to worry about lenders and their requirements; but if you’re like 48.6 million Americans, you would have applied for a home loan.
A mortgage loan is the last step for a buyer to enter his home. Although thousands apply for a home mortgage daily, about 26% are approved. The credit score is the most critical variable for an applicant to be rejected.
Several programs have different criteria and minimum credit requirements for home loan applicants. Some programs approve loan applicants with scores of 5.8 or higher. Thus, depending on your score, you can access the money you need to purchase houses. The median credit score was 758. (FHFA, 2021)
Lenders require that a home loan applicant’s income exceeds 75% of the mortgage payment.
You can visit websites where you can pull your credit report and score free of cost. The freecreditreport.com is a tool created by Experian to check your credit history and fico score. Also, The Federal Trade Commission has a website where you can freely check your credit and fico score annually. Take the time and review your current credit situation. By doing this, you will be ahead of lenders and have confidence in the ground you step on.
Search various programs offered by banks and lenders, do not stick with the first one. Ask the right questions such as; interest rates, terms, and life of home loans. Lenders need you because you are the raw material for their industry.
If you are asked to authorize running your credit score, do so ONLY if you have gathered sufficient information and have decided to work with that particular lender. Inquiries have negative effects on your credit report.
Last but not least, Check with your local authorities and State. The federal government, under the HUD, has important information and tips for first-time home buyers. The Cities, Counties, and States also have programs and incentives for home buyers.
Default & Foreclosure
When you are searching to buy the right house for you and your family, the last thing that may cross your mind is defaulting or having to face foreclosure. People don’t consider it necessary to think about such negative things. Contrary to popular perception about mortgage payments and the natural enthusiasm when you have a place to call home, It is helpful to know what to do in case an adverse situation shows up.
A default occurs when borrowers fail on their mortgage loan payments and fall behind. Default terms vary by loan type and mortgage contract. Be sure to read the terms of these contracts to determine what qualifies as a breach for you.
A borrower is considered in default when he or she fails on mortgage payments, property taxes, or maintain proper insurance.
Foreclosure is a legal action by which the owner forfeits all rights to the property.
What happens in a foreclosure? The specifics can vary according to state law, but we can break it down into five points.
- Missed payments. It occurs when the borrower fails to make timely mortgage payments.
- Notice of Default or Public Notice. After three or six months of missing mortgage payments, the lender will record a public notice or notice of default with the County Recorder’s Office. At this point, the borrower is informed that they are in danger of foreclosure.
- Pre-foreclosure. It is a period of time between 30 to 120 days. Depending on local regulations, the borrower can arrange with the lender via short sale or get current with payments.
In case of the default is not paid off during this period, the foreclosure will continue.
- Auction. The lender or its representative sets a date for the home to be sold at a foreclosure sale. At the auction, the house is sold to the highest bidder for cash payment.
- Post-foreclosure: If no one purchased the property in the auction, the lender takes the property, which is called (REO) real estate owned. Banks and lenders sell their properties either by the real estate market or at a liquidation auction.
Depending on the state and type of foreclosure, you may have from 111 days to 12 months or more before your home is foreclosed.
Some homeowners in default or foreclosure take action before things get ugly. They look for an easy and effective way to sell their properties. Listing the property or contacting a real estate investor is the fastest way to prevent a potential foreclosure.
Selling a home off the market takes about seven days in most cases. Homeowners who want to sell their properties are in control of the sale transaction and do not have to pay commissions or any other cost related to the home sale.
An investor is a good alternative if you need to sell your home right away.
Are You Ready to Search For The Right House?
House-hunting can be both fun and frustrating. It’s a time when you get to explore your future home, but it can also be overwhelming with all the choices out there.
Buying a house is the most important decision for a person. Many people have no guide other than their enthusiasm and do not pay attention to the crucial details before submitting an offer.
If you need help along the way, there are many resources where you can complement and dig out home-buying information. Reach out to experienced agents and investors in your area who are more than happy to assist in whatever way possible.
We hope that our tips have helped prepare you for starting your search. Whether you decide to look online or visit some of your local home sellers, we wish you luck in finding the perfect house for you and your family.