Being a smart home buyer is a lot more difficult than you might realize, especially if you’re a first-time homebuyer. First-time home buyers have no experience with the home-buying process. They may encounter more challenges due to not knowing what to expect.
However, being a smart home buyer is crucial to ensuring you get the home you want without sacrificing your financial stability. With that in mind, the following are four habits of smart home buyers:
1. Maintain a good credit score
One of the most important things you can do as a home buyer is to maintain a good credit score. Your credit score will play a big role in qualifying for a mortgage, not to mention determining the interest rate you’re offered. It’s essential to ensure your score is as high as possible before looking for a new home.
2. Save money before going house hunting
Be patient about becoming a new homeowner. You should save enough money to make a sizable down payment, cover closing costs, and have reserves left in case of a financial emergency. The bigger your down payment is, the less your house will cost you in the long term since you’ll pay less on interest. Additionally, you won’t have to pay mortgage insurance if you can make at least a 20 percent down payment.
3. Budget for the long-term
Just because you can afford the monthly mortgage payment doesn’t mean you should max out your budget. You need to consider other expenses associated with homeownership, such as property taxes, insurance, repairs, and maintenance. By budgeting for these additional costs, you can ensure you’re still comfortable with your mortgage payment after everything is said and done.
4. Make sure your personal life is in order
Make sure that you’re employed full-time, have a good handle on your finances, and have stability in your personal life before you begin the home-buying journey. If you’re in the middle of big life events, such as getting married, starting a family, or beginning a new job, you might want to wait until things settle down before buying a home.
These are just a few habits you should adopt if you want to be a smart home buyer. By doing so, you can be sure you’re prepared for the challenges of the home-buying process. For more advice on being smart home buyers, contact us at Randy Lindsay today.
When you buy a house, you’ll want to insure it. If you take out a mortgage to pay for your home, the lender will likely require you to buy homeowners insurance as part of the agreement.
Even if it isn’t required, getting your home insured against damage or loss is a good idea. But what many homeowners don’t realize is that their insurance policy may not cover everything they think it does.
It’s important to understand what your homeowner’s insurance policy covers so you’re not caught off guard if something happens to your home. Knowing what it doesn’t cover will allow you to purchase additional coverage if necessary. With that in mind, the following are four things that your home insurance policy probably won’t cover:
Standard home insurance policies exclude coverage for flood damage, so if your home is inundated with water from a storm or other flooding event, you will likely have to foot the bill for repairs and replacements yourself. If you live in an area prone to flooding, purchasing separate flood insurance is a good idea.
2. Earthquake damage
Homeowners insurance also typically excludes coverage for earthquake damage. If an earthquake hits and your home sustains damage, you will likely have to pay for repairs and replacements out of pocket. If you live in an area that’s susceptible to earthquakes, you may want to purchase separate earthquake insurance.
Mold is a type of fungus that can grow in homes and other buildings. It can cause property damage and pose health risks. Mold typically develops and spreads from moisture, so it’s often found in bathrooms, kitchens, laundry rooms, and basements. Because mold growth is so common, most standard homeowner’s insurance policies exclude coverage for mold damage.
4. Pest infestations
Pests like rodents and insects can damage your home and pose health risks. If your home becomes infested with pests, you will likely have to pay for pest control. You might not be bothered about paying for pest control; however, some pests, such as termites, can cause significant damage to your home.
A standard homeowners insurance policy will provide coverage against things like fire, wind, and snow damage, as well as vandalism, theft, and personal liability. However, it’s important to know what it doesn’t cover so you can plan accordingly. Contact us at Randy Lindsay today for more advice about the home-buying process.
When you’re buying a home, closing day is when the sale becomes official. It’s when the title of the property is transferred from the seller to the buyer. For homebuyers, there’s nothing quite as exciting (and nerve-wracking) as closing day. What few buyers don’t realize is the closing involves much more than just signing on the dotted line.
Here’s a look at what you can expect on closing day:
- Pay the down payment: If you’re taking out a mortgage, then you’ll need to have the down payment available on closing day. The amount of the down payment will depend on the type of loan you’re getting and the purchase price of the home.
- Pay additional fees: When you buy a home, there are fees that must be paid in order to finalize the sale. These include the loan origination fee, the appraiser’s fee, the title insurance policy, and more. You’ll need to have the funds for these fees available on closing day in the form of a cashier’s or personal check.
- Provide proof of insurance: Before lenders will release the funds for the loan, they want to see proof that you have homeowners insurance in place. This is to protect their investment in case something happens to the property.
- Provide identification: You’ll need to show a form of identification, such as a driver’s license, on closing day. This is required to sign the loan documents.
- Sign documents: You’ll sign a lot of paperwork, including the mortgage note, the deed of trust (or mortgage), and other documents related to the loan. You’ll also sign all of the closing disclosure documents, which detail the final terms of the loan and the costs associated with it. Finally, you will sign the transfer of the deed, which officially transfers ownership of the property from the seller to the buyer.
- Receive the keys: Once the closing is complete and all the paperwork has been signed, the seller will hand over the keys to the property.
There’s a lot to do on the day of closing, but if you’re prepared for it, the process should go smoothly. It’s important you work with an experienced real estate agent and loan officer. They can guide you through the entire process of buying a property. For more information on buying a home, contact us at Randy Lindsay today.
If you’re looking for a new home, you have two main options: You can buy an existing home or you can build your house from the ground up. The decision of whether to buy or build a home is a big one. There are pros and cons to each option, and the right choice for you will depend on your specific circumstances. Here is a brief breakdown of the benefits and drawbacks of buying vs. building a home:
The Pros and Cons of Buying a Home
Buying an existing home tends to be more affordable. You can also buy older homes that have unique characteristics that you won’t find in newly built homes. You’ll have more options in terms of what neighborhood you prefer. Additionally, you won’t have to wait as long to move into a home that you’ve bought.
Some of the disadvantages to buying an existing home include it’s very hard to find the perfect home. You may not be able to find a home that perfectly suits your needs and preferences. You may also have to deal with expensive repairs or renovations, especially if you’re buying an older house or one that may not be up to code.
The Pros and Cons of Building a Home
When building a house, you’ll be able to design your home exactly how you want it. You can customize every aspect of your home, from the layout to the finishes. Because everything is brand-new, you probably won’t need to spend a lot of money on repairs or replacements for some time as well.
The biggest downside is that it takes quite a bit of time – at least several months – to build a new home. Additionally, it can be quite expensive to build a home from scratch. You’ll need to consider the cost of land, materials, labor, etc. Finding land on which to build can also be a challenge.
Buying vs. Building a Home
There is no right or wrong answer when it comes to deciding whether to buy or build a home. The best decision for you will depend on what kind of home you want, your budget, and whether or not you have time constraints. It all depends on your individual circumstances.
For more advice on buying or building a home, contact us at Randy Lindsay today.
You’ve finally found your dream house, and you can’t wait to submit a bid! However, you’re not the only one interested: You have competition. A situation like this is likely to occur when you’re in a seller’s market, and it’s critical that you know how to navigate it.
If you get caught up in a homebuyer bidding war, you’ll want to be sure to avoid the following mistakes:
- Bidding all your money: It can be easy to get caught up in a bidding war, but the last thing you should do is bid the entirety of your budget. It could make things very tight financially speaking, especially since you should put aside money for things like maintenance and repairs.
- Lowballing the seller: If you know there’s another buyer in the picture, don’t try to submit a lower offer thinking you’ll be able to submit a second offer. The seller may simply decide to accept an offer from the competing buyer. Make sure your first offer is a strong one if you want to be taken seriously.
- Removing all contingencies: Removing all contingencies from your offer will be appealing to sellers, but you’re putting yourself at serious risk. For instance, if a home inspection discovers significant issues, you won’t be able to back out of the offer without incurring a financial penalty. If you plan to remove contingencies from your bid, be careful about which ones you remove.
These are a few of the common mistakes you should avoid if you find yourself in a homebuyer bidding war. It’s essential that you don’t get too caught up in a bidding war and proceed cautiously.
For more homebuying tips, be sure to contact us at Randy Lindsay today.
Back in the day, it wasn’t uncommon to use lead paint. Lead was used because it allowed the paint to dry faster and resist moisture; however, once it was discovered that exposure to lead paint could result in long-term negative health effects it was banned in 1978. Although you won’t find any homes constructed after 1978 with lead-based paint, older homes may still have it.
Should you buy an older home if lead-based paint was used?
You Can Remove Lead Paint
Sellers are required to inform you if they know that lead-based paint was used in their homes. If they don’t know and you’re buying a house built before 1978, then they should give you ten days to have a professional test the property for lead paint. It’s worth noting that sellers are not required to test for lead-based paint themselves.
If you have children, you may want to avoid homes with lead-based paint. Older paint chips may fall, and if they consume any of the paint, it can cause serious health issues. If you don’t have children, this won’t be as big of a concern, but you likely don’t want to live in a house with lead paint either way.
Fortunately, lead paint can be removed after you buy a home. Just make sure a professional does it. If you do it yourself (DIY), you risk exposing yourself to lead-based dust and debris.
You Can Encapsulate Lead Paint
Another option is to encapsulate the lead-based paint by adding a special liquid coating over the top. However, this will only work if the paint is in good condition.
If you have any other concerns about buying a home or would like to speak with a real estate agent, contact us at Randy Lindsay today.