Don’t buy if you can’t stay put.
If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, or at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner — even in a rising market. When prices are falling, it’s an even worse proposition.
Start by shoring up your credit.
Since you will most likely need to get a mortgage to buy a home, you must make sure your credit history is as clean as possible. A few months before you start looking for a home, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-a-half times your annual salary. But you’ll do better to use one of the many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford. Agents here at Velocity can also sit down to discuss this with you at any time!
If you can’t put down the usual 20% on a home, you may still qualify for a loan. There are a variety of public and private lenders who, if you qualify, will offer you low-interest mortgages that require a down payment as small as 3% of the purchase price.
Buy in a district with good schools.
In most areas, this advice applies even if you don’t have school-age children. When it comes time to sell, you’ll learn that strong school districts are a top priority for many homebuyers, making it easier to sell your property for a higher price.
Get professional help.
Even though the internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer’s agent, if possible, who will have your interests at heart and who can help you with strategies during the bidding process.
Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the home for a long time — say three to five years, or more — it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.
We’re happy to discuss any of these points in more detail, so please reach out to us if you would like more information.