Buying a house is a huge milestone on the road to adulthood. While you might be spending a lot of time scrolling through Zillow on your phone, there’s more to buying a house than that.
There are a lot of responsibilities to consider and details to anticipate. Here are 5 things you may not have considered when buying a house.
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Types of Insurance
After you’ve gone through all of the fun parts of buying a house, you have to start thinking logistically. Taking care of your new home means thinking about its longevity. There are a few different types of insurance you’ll need.
Homeowner’s insurance will help protect personal items within the home such as diamonds or expensive electronics. If your home is located in a flood zone, you’ll need to get flood insurance as traditional insurance doesn’t typically cover this.
Then there are insurances based upon your loan types such as PMI (private mortgage insurance) or title insurance.
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Always Do A Home Inspection Before Buying
We can’t stress the importance of a home inspection enough. This is usually paid for by the buyer. When you initially tour the home, you typically only see cosmetic issues.
A thorough home inspection will be able to give you more information about the finer details you may have missed. These include things such as any foundation issues, roof repairs that need to be made, or heating and cooling issues.
Your realtor should always attend the home inspection. What the inspector discovers within the house can have a major impact on the final sale price. It’s the realtor’s job to negotiate with the seller to get you the lowest price possible.
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Acquiring The Right Loan
As much as you’d love to be debt-free, most people will have to take out some type of loan to cover the cost of the house. There are several different types of loans including, but not limited to:
● Conventional loan
● VA loan
● Jumbo loan
● Fixed-rate mortgage
● Adjustable-rate mortgage
It’s best to meet with multiple lenders to get an idea of what you can approve for. Things like your credit score and current household income will impact what you could initially be approved for.
Always get pre-approved for a loan before you start house hunting. Sellers won’t take you seriously as a buyer if you haven’t solidified any financial backing.
Here’s a homebuying hack you can use when getting pre-approved. Have different lenders run your credit score on the same day. This way, it won’t have as big of an impact on your credit report.
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Extra Expenses After Buying The House
While you may have budgeted for the initial cost of your home, you also need to take into consideration the expenses that come afterward.
The furnishings you have from your previous home or apartment might not be enough to fill your new home or don’t quite fit with the aesthetic. This could easily be another few thousand dollars.
Any repairs or renovations that are required will come out of your budget as well. Then there are the utilities you may not have been used to paying for such as water or landscaping.
When creating your initial budget, include every additional cost that might be associated afterward. You may be able to get approved for a higher loan to cover these costs. Otherwise, you’ll need to save additional money before buying.
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Secure Your Lock-Rate
The housing market has taken a huge turn since the COVID-19 global pandemic. It’s primarily in favor of the seller which means houses are going for significantly higher than their actual value.
Since mortgage rates tend to shift with the housing market, you have the option to lock in your rate. A lender will give you anywhere from 30 to 180 days to hold your mortgage rate.
This means you’ll know exactly how much you’ll be paying in interest every month. It won’t change as long as you purchase the house in the allotted time frame.
