As a home purchase is often the largest and most important purchase you will make, you want to make sure that you have all the information needed to make the best choice possible. By doing your homework beforehand, you can save yourself many headaches later on.
Here are 7 important things to consider before buying a home.
1. Before you start house hunting get pre-approved for a mortgage.
Unlike mortgage pre-qualification, a mortgage pre-approval means that you have gone to a lender and they have actually checked your credit and verified your documentation to approve a specific loan amount (usually for a particular time period such as 90 days). This will help to ensure that you don’t waste time looking at houses you can’t afford. Getting pre-approved for a mortgage will also help you move faster when you find the right home and it puts you in a better position to make a serious offer.
Don’t waste your time and efforts looking for a home out of your price range. Even if you can manage to get a loan to purchase a home at the top end of your mortgage range, make sure that it does not leave you house poor. Both the real estate market and circumstances in your life can change and it is a good idea to have a bit of breathing space between the actual amount of your mortgage payments and the maximum you can afford each month.
3. Plan to stay in your home for several years.
No one can predict the real estate market with absolute certainty, so when considering a home purchase, it is usually a good idea, especially for first time buyers, to plan to commit to remaining in one place for several years. This will help increase the likelihood of gaining rather than losing money on your home purchase, if and when you sell.
4. Hire a licensed home inspector to make sure there are no obvious issues with a potential home.
When purchasing an older home, it can be hard to know what kind of issues you might run into. Hiring a home inspector can help to make you aware of any problems you will face when purchasing a previously owned home. Make sure you do your homework before hiring a home inspector. British Columbia requires it inspectors to be licensed, which means they must belong to one of four organizations with a recognized level of education and experience and carry liability insurance but it is a good idea to make sure that you check their credentials and make sure that there are no outstanding complaints against them.
5. Find out what additional monthly costs you will need to budget for by asking for a copy of last year’s utility bills.
Quaint older homes, large or high maintenance landscapes, high ceilings or a wall of windows might be an attractive feature to you, but could cost you extra each month in the form of utility bills. With the increasing costs for gas and electricity, it is a good idea to have a rough idea of how much the utilities will cost you each month and if the amount could push your monthly payments beyond affordable.
6. Research the property taxes for the neighborhood as well as the home.
Even if you can manage the existing property taxes on a home, it might not be so affordable if the property taxes significantly increase each year. It is a good idea to do a bit of research on the tax rates in the community going back a few years as well as the specific neighbourhood you are looking at purchasing in.
7. Double check for property restrictions with city hall.
You don’t want to find out restrictions or issues regarding the home or property after the fact. It is important to look into any neighborhoods zoning and community restrictions, as well as any potential easements, liens or other restrictions relating to the property.
The more information you can get on a potential home before purchasing, the better you will be able to make a good choice and avoid a costly mistake later. While this is all information that you are capable of obtaining as a buyer, the process can be a bit overwhelming, especially for first time buyers. A good real estate agent can help you get all of the information you require as well as provide names of other reliable professionals you may need during the buying process.
I hope this provides you with a good idea of some of the things you need to keep in mind while you are in the buying process. Did I miss anything? Please let me know in the comments below.