Tips to Buying a House & Getting the Right Mortgage
Buying a home is exciting and fun, but sometimes it can be a little nerve wracking. A lot happens during the home buying process and it’s easy to forget, or overlook, something along the way. These home buyer tips highlight some important information that you should consider throughout the process. Whether you're a first-time home buyer or looking for your forever home, these home buyer tips can help you make the best decision!
1. Have the Right Equipment
When a bull rider comes flying out of the chute he needs the right equipment, like a padded vest, helmet, and help standing close by, to protect him and help him focus on his job. Getting a mortgage can feel like climbing onto the back of a giant, angry bull, but the right equipment will protect you and help you feel confident. The right equipment includes a strong pre-approval so you know how much you qualify for, low interest rates, and a great loan officer standing close by. At Wasatch Mortgage we’ll provide you with all the right equipment. Give us a call to get started.
2. Make a Wish List
As you think about the home you want to buy, make sure to start a wish list. It can help you determine what you need, want, and wish for in your new home. Then when you look at homes, your wish list will help you determine if each house fits your needs for now and in the future.
3. Build up Your Down Payment Base
Before a runner tackles a marathon, they take months to build up their “base mileage.” They slowly increase the distance they run each week so they’re ready on race day. You can start building up your base mileage by saving money each month to help cover your down payment & other costs. It’s a lot easier to build up your base over time than trying to come up with all that cash once you've found the perfect home.
4. Don't Spend too Much on Your New Home
It’s basically a tradition to overeat on Thanksgiving right? The tasty turkey, family favorites, and incredible desserts make it easy to overindulge, but that much food can leave you feeling sick. If you spend too much money on a home, it can leave you with the same sick feeling. That beautiful home can stretch your monthly budget and cause financial concerns. When you buy a home, stay within your pre-approved limit to create a healthy budget. To see what a healthy home budget looks like, give us a call or stop by and meet with one of our loan officers.
5. See if the Home is in a Flood Zone
Flood zones are geographical areas that FEMA (the Federal Emergency Management Agency) has determined could potentially flood under certain circumstances. When you buy a home in one of these flood zones, you'll have an increased chance of flooding/water damage, as well as higher insurance costs. So to avoid a surprise along the way, check to see if a home is in a flood zone before you've committed. Here's link to check the Cache County flood zones. If you're looking to buy somewhere else, search for that county's floodplain map.
6. Avoid Big Purchases
Surfers use a method called “duck diving” where they go under a wave to ensure that their progress from paddling out is not lost by being washed backwards from the wave. Purchasing big items, like a car, new 4-wheeler, or appliances, can push back the progress of your mortgage loan and ability to buy a new home. Make sure to duck dive any big purchases as you search for your new house and especially during the home loan process for smooth surfing.
7. Season Your Down Payment
Just like you season a steak to develop juicy flavors, you need to season your money before you close your home loan. Seasoning your money simply means letting it sit, untouched, in your bank account for at least 60 days before your closing. You should season the money you plan to use for your down payment & closing costs.
8. Pay off Small Debts
To qualify for a mortgage your monthly debts, like student loan payments, credit cards, and your new mortgage, have to be at or below a certain percentage of your monthly income. Loan officers call this your debt-to-income ratio. Paying off smaller debts can increase your chance of qualifying for a mortgage by lowering that debt-to-income ratio.
9. Check Out the Neighborhood
Before a snowmobiler hits a new line, they check their surroundings to make sure they’re safe from avalanches and other dangers. When you’re looking at buying a home, you should check your surroundings. Does the neighborhood feel safe? Is it close to your job and grocery stores? Do the schools have good ratings? These types of questions can help you determine if the neighborhood is one you’ll like or an avalanche waiting to happen.
10. Look Beyond the Staging
Easter eggs look vibrant and fun, but no matter how they’re decorated, they’re still eggs. A house with brilliant staging is kind of similar. Staging can make a home appear spacious and beautiful, but sometimes staging is used to hide flaws in the home or portray an unrealistic design, like putting a T.V. where there isn’t an electrical outlet. When you tour houses, look beyond the staging. Pay attention to the home’s actual structure and layout.
11. Shed Extra Financial Weight
In late fall moose shed their antlers, which can weigh up to 60 pounds, to help them handle the harsh winter months ahead. Similarly shedding extra financial weight, like credit card debt and auto loans, can help you prepare to handle the cost of owning a home.
12. Remember the Whole Pie
Your monthly mortgage payment is kind of like a pizza pie. The whole payment is determined by adding up the individual slices and forgetting to include a piece can be devastating. It could mean discovering that you can’t actually afford the payment on your dream home. When you’re trying to calculate the payment on a home, remember that there’s more to the pie than principal and interest. Other slices can include mortgage insurance, an escrow account that covers your property taxes and homeowners insurance, and even H.O.A. fees.
If you’d like help calculating the payment for any home, give us a call. We’ll help you determine which slices you need so you can see an accurate, whole payment and we promise not to be too cheesy!
13. Review Your Credit
Have you used reviews to help you plan for a trip? If you’re like us, and 95% of travelers, you’ve found a great place to eat or an awesome activity by checking reviews before you travel. As you start planning for a new home, stop by Wasatch Mortgage to review your credit scores and history. Checking your credit beforehand can help you book a better mortgage experience with fewer delays in your trip home.