10 Things You Should Know Before Purchasing a Home
If you're in the market for a new home, there are many things to consider. From finding an affordable property and determining your budget to figuring out whether or not homeowners insurance is right for you, you must do your research before diving into the process. In this blog post, we'll walk through 10 things every prospective homeowner should know before taking on their next mortgage and how The Davis Real Estate Development Group can help you every step of the way.
1) Credit score: One of the most important things a lender will look at when considering your mortgage application is your credit score. Your credit score reflects how responsible you have been with debt in the past. This can impact everything from the interest rate you qualify for to the amount of money you can borrow. Most lenders will want to see a score of at least 620 before approving a mortgage.
2) Pre-approval: Getting pre-approved for a mortgage is the first step in the homebuying process. This involves meeting with a lender and providing important financial information, like your income and debts. Once you're pre-approved, you'll know how much money you can borrow and will be in a better position to start your home search.
3) Down payment: One of the biggest factors determining how much you can borrow is the size of your down payment. The average down payment for a home purchase is around 20%. Still, there are many programs available that offer assistance with this amount. Talk to your lender about what program will best suit your needs.
4) Home inspection: Once you've found a home that you like and are ready to make an offer, it's important to have the property inspected by a professional. A thorough examination of the house can uncover any problems or issues that may impact its value before signing on the dotted line! Plus, most lenders require a home inspection before they'll approve a mortgage.
5) Closing costs: Closing costs are the fees and expenses associated with finalizing your mortgage and typically range from about $2000 to $5000. These costs can include title insurance, appraisal fees, and legal fees. Be sure to budget for these additional expenses when planning your home purchase.
6) Mortgage insurance: Mortgage insurance is typically required when you put down less than 20% of the home's value as a down payment, and it protects your lender in case you can't pay back your mortgage loan. This coverage will be paid for by adding monthly fee to your mortgage payments—typically about $50 -$100 per month.
7) Property taxes: Another monthly expense you'll need to budget for is property taxes. These are assessed by your local municipality and vary depending on the size and value of your home. You can expect to pay between $200-$1000 annually in property taxes.
8) HOA fees: If you're buying a condo or a home in a neighborhood with a homeowners association, you'll need to budget for HOA fees. These fees include maintaining common areas and paying for security or trash collection. Expect to pay around $50-$300 per month in HOA fees.
9) Homeowners insurance: Lastly, it's important to have homeowners insurance in place before you move into your new home. This coverage protects you in the event of a fire, theft, or other natural disasters and typically costs between $300 and $1000 per year.
10) Davis Real Estate Development Group: Here at The Davis Real Estate Development Group, we are your once source for all things real estate! We have various programs to help you along the journey of Home Ownership. We have Credit Repair Specialists, Mortgage and Financial Lenders. In addition, we offer Home Inspections which are highly recommended before purchasing your home.
Now that you know what to expect, it's time to get started on your mortgage application! Talk to Whitney Davis, your trusted Real Estate Agent, today about getting pre-approved for a mortgage and taking the first step towards homeownership.
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