House Buying Checklist: Do These 14 Things Before Signing a Mortgage
Purchasing a home is many Americans’ life dream. But it can be hard to know where to start.
This list will help ensure you have your ducks in a row before making what could be the biggest purchase of your life.
1: Lending a Hand
Did you know that about 20% of Americans have errors on their credit reports that they’re unaware of? Fixing these credit issues before applying for a mortgage is vital. Otherwise, the mistake could unfairly hike up your interest rate.
2: Get It Inspected
Want to save potential headaches on your home in the long run? Get your home inspected as soon as your offer is accepted on your (hopefully) home-to-be. It’s best to take this one step further by adding wording to your offer that it’s contingent upon a satisfactory professional house inspection. According to a Porch.com study, home inspections save buyers an average of $14,000.
3: Check Out the Neighborhood
It doesn’t matter how many times you visit your prospective home if you always visit it at the same time of day. Mix up the times you go there to see if the noise levels or environment changes. Furthermore, make sure to visit on both a weekday and weekend.
4: Flood Warning
Your potential home doesn’t need to be teetering on the edge of a river to be at a flooding risk. So, check with your realtor or a local insurance agent to find out if the area floods. If you learn that the owners have a sump pump or if they disclose a leak, buying the home might not be worth it no matter how much you love it.
5: Environmental Factors
Depending on the area you want to buy and your worry level regarding flooding, you could take things a step further and hire a geologist to assess your prospective land before forking over your down payment. An area free of tectonic faults and with a strong bedrock foundation are some of the items your geologist will likely inspect.
6: Look For Help
Certain people, including first-time homebuyers, can often take advantage of state or federal programs to help with the cost of purchasing a home. For example, the IRS gives first-time homeowners the option to withdraw up to $10,000 from their IRA to buy a primary residence without penalty. If you’re purchasing a new home with a partner and you both have funded IRAs, that means you can withdraw up to $20,000 penalty-free.
7: Fast Fixes
It’s common for home inspection reports to come back with suggestions for minor home improvements. Instead of putting them on your rainy day list, consider tackling them right away. Ignoring small fixes could turn into larger, more expensive fixes down the road.
8: Smaller Is Better
It may be tempting to size up for your first home, but avoid buying more than what you need. Even if you can afford a 5,000-square-foot home, the costs of furnishing and cleaning it could do a number on your wallet.
9: Caught Off Guard
Take special care with checking when equipment like the hot water heater, dishwasher, and dryer were installed in your potential home. Even if the equipment is new, if it was all installed at the same time, you could end up having a large bill many years from now if everything starts breaking around the same time. Building up an extra-cushy emergency fund is vital in such circumstances.
10: Save Room
Similar to the previous point, first-time homebuyers are often so excited to pour their money into decorating their new digs that they give little thought to building up an emergency house repair fund. Anything can break at any time, and such bills can take a financial toll on an unsuspecting household.
11: Class In Session
Some cities and towns offer first-time homebuyers a class to help them navigate the homebuying process. An added perk? Taking such a class might help you become eligible for lower interest loans and other financial perks.
12: Home Smart
New homebuyers often don’t pay much attention to how much their utility bills would be once they buy a home, but it’s wise to do so. Ask for the previous owner’s utility bills and do your due diligence to see if the cost of water, electric, gas, and more is in line with average prices in the area you’re looking at.
13: Label Maker
Let’s assume you purchased the home of your dreams. Before moving in, head to your breaker panel and label what part of the house each one connects to. While you’re at it, test your main water shut-off.
14: So Organized
Whether organization runs in your blood or you’re aiming to get there, creating a folder in your email specifically for your house is wise. Within the folder, you can create subfolders for different bill payments and house-related correspondence.
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