Homeownership is one of the many parts of the American dream. Everyone who lives in the US wants to own a home (or two) at some point in their lives. There aren’t many Americans who would want to rent for the rest of their lives, especially once they raise their own family.
A survey found that 84% of Americans that purchasing a home is a priority to them. About 100 million are looking to buy a home in the next five years, while 27 million are planning to buy one this year. This number shows how much you are not alone in the desire to own a home. But it can be quite challenging to buy a home, even this year when mortgage rates are low. It’s not as simple as getting a mortgage, looking for a home, and then buying it. There are a couple of things you’ll have to prepare. Here are the essential things you need to have before buying a new home.
Get Your Credit Ready
A good credit line is going to be one of the most important things you need. The reason why so many Americans use credit to buy the home of their dreams is that no one has the cash for such an expensive investment in their lives. Quite similar to buying a car, purchasing a new home requires you to go into debt, and that’s not necessarily a bad thing. Buying a home on credit means that you can make it more affordable for you and your family throughout the years.
Remember that there are various expenses you’ll have to pay aside for debts, so at least buying a home using credit can give you that breathing space. But remember, it’s important only to buy a home that you can afford because you don’t want to be in debt for the rest of your life. There are various ways you can use credit to buy a home. Here are some of those ways.
Mortgage
Many Americans desire to use a mortgage to buy a new home because it gives them the chance to pay for other things as well, such as other debts they might have in their lives. This is the most flexible kind of credit, but it is also open to higher interest rates. A decent amount of Americans are capable of paying their mortgage, although it does take some time. If you think of only using your loan to buy a home, it’s better to get a home loan.
Home Loan
A home loan is a kind of credit that is specifically used to buy residential property, which means you can’t use this particular loan in paying for anything else. It’s not that flexible either, so if you’re looking to get extra cash from your loan, you can’t get it from this kind of loan. However, if you’re looking to buy a home for a lower price, then this is the best loan to get.
Hire a Home Inspector
You can’t be the only one inspecting your chosen home. When looking for a home to purchase, you’re going to need an expert to look into every nook and cranny to see certain problems in your new home. Home inspectors always find a problem in their client’s home, but what you are looking for are major structural problems that might be hidden from the naked eye. These can lead to disastrous accidents, so consider hiring a home inspector when choosing the right home for you.
A home inspector can cost between $300 to $400, depending on what kind of services you need. This additional cost can be hefty on top of your loan, but it is a requirement. So keep this in mind when you are out hunting.
Have Extra Funds for Transitional Costs
Many homeowners tend to forget to have additional money for transitional costs. This can be a serious problem, especially if you don’t have enough money during your transitional month. Remember that if you’re renting, you’ll still have to pay for the month when you’re planning to move, and not having enough money for that can be disastrous. Moreover, you’re going to need moving services because you certainly can’t move everything from your apartment into your new home overnight. Save yourself the trouble and keep some money for when you move.
Here are some essential things you need when buying a new home. As a rule of thumb, always plan months before buying your new home. Use online calculators to know your plan’s cost and whether you can sustain the cost for years to come. By doing these things, you should be prepared and ready to invest in a home.