New Home Purchase
There are a great many factors that go into buying a new home, whether researching school districts, evaluating floor plans, investigating the community, or finding out about property taxes and liabilities. Combine all of this with the hassle of moving out of your old house and into your new one, plus synchronizing closing dates so that you are not stuck paying a double mortgage, and it becomes an overwhelming experience. The cursory search for the perfect home is perhaps the most exciting part because there is so much to see, but when a more serious interest takes hold, here is a list of questions to be sure to ask yourself:
- Structurally speaking, is the house sound? Has it had any major repairs or major damage since it was built?
- Do all the mechanical and electrical systems (heating/cooling, water, gardening, etc) work well?
- Will the space suit you? Measure to make sure that furniture will fit, and make sure there is enough storage for your family.
- If there is anything broken or in need of repair, will the seller pay for it?
Questions to ask the Seller:
- Why are you selling the home? This question is to get a feel for how motivated the seller is: are they moving to another state, out of the country, or just over the hill? Chances are that you will get a better price with a seller that has to sell now, because they already have other commitments.
- What can you tell me about the school district, and about the neighborhood? This question is designed to get some specific information about the little quirks that every neighborhood has, and inside information on some of the schools.
- Has it had a termite inspection? This is a good leading question to ask about other inspections as well, and if you can schedule some extra ones, for such things as gas leaks and asbestos, plus the condition of the furnace, roof, and air ducts.
When you do finally decide on a home, find out first how much you can afford to spend on a mortgage. Generally speaking, it should not be more than 29% of your gross monthly income. By now, you should have researched interest rates and the current trends, and have a basic idea of what rate you will likely get. Remember that the lower the interest rate, the lower the monthly payment. Then, decide on a lender. If you are a first time buyer, you might feel more comfortable with a broker, who does the shopping to lenders for you as well as all the necessary paperwork. On the other hand, you might not want to deal with hidden fees or hidden agendas, and in that case would opt to deal with a direct lender.
Then after figuring the Loan-to-Value (LTV) ration, which is the appraised value of the home compared with your loan amount, you decide on which loan program best suits your needs. Choose from a Fixed Rate Mortgage (FRM), Adjustable Rate Mortgage (ARM), and more.