The Ultimate House Hunting Guide - ISN

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Buying a home is one of the biggest investments you’ll make in your lifetime. Before you head out to tour a few open houses or scour the latest listings, there are some crucial things that every new home buyer should know. Whether it’s your budget or the type of home that will provide you with the ultimate dream space, understanding the house hunting and home buying process is key to your success. Check out this helpful guide that covers everything you need to know when you head out to go house hunting, so you can find the perfect home for you.

What to Consider Before Hiring a Real Estate Agent

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Before you hire a real estate agent and plan to make an offer, there are some important financial aspects to keep in mind.

Maximum price you’re willing to pay. Look at your current debt-to-income ratio and think about how much you’re actually willing to pay for a new home. Remember that the asking price isn’t the only thing that factors into your budget, so keep this in mind when you set a limit. Even if you can afford more, it doesn’t necessarily mean that you need to spend it all on a home. Try to find a beautiful, modest home that will serve your needs while still fitting into a reasonable budget, so you don’t end up “house poor.”

How much house do you need? A gorgeous, massive home is wonderful, but do you need all of that extra space? Not only is a big house a lot to keep clean, but it will also cost you more in terms of overall monthly expenses and maintenance. If you’re a couple without kids, consider a nice two-bedroom home that you can grow into. A three-bedroom house is great if you want to offer guests a comfortable place to sleep, but it isn’t a must if you find that three-bedroom homes are starting to reach well above your budget and desired price range.

Down payment. Most lenders expect a minimum down payment of 10 to 20-percent, depending on the type of mortgage you get. Make sure that you have enough money already saved for the down payment and other expenses, like the home inspection and closing costs. Get pre-approved before you start house hunting so you can shop in confidence.

Mortgage rates. Rates vary between lenders and loan programs, so shop several lenders to find the best rate. Mortgage interest rates change frequently, so find out if you can get a “rate lock” once you qualify. This will protect you in the event that rates rise and keep your mortgage locked in at a lower rate.

Features to Consider When Buying A House

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After you’ve found the right mortgage program and a great lender, it’s time to think about the home features that are most important to you.

Location. This is the golden rule of house hunting, so make sure you know exactly where you’ll want to live for many years into the future. Whether it’s proximity to a good school district, your job, or shopping, the location is the most important thing to consider when you’re looking for a new home.

Size. Do you need two full bathrooms and three bedrooms? How big should your kitchen be? The answer depends on how many people are in your family and your specific lifestyle. If a big backyard is important to you, add it to your list of must-haves. Come up with a minimum size (square footage) that you require before you start house hunting, so you don’t end up cramped and wishing you bought a larger home later.

Age of the house. Some people love to work on a fixer-upper, while others prefer new construction with all the bells and whistles. A new home will require less maintenance, but it might not have the same charm as an older home will. Determine which is most important to you when you’re looking at houses to buy. Always get a home inspection regardless of the age of the home.

Maintenance. Remember that owning a home requires a lot of work and frequent maintenance. From the roof and the HVAC system to plumbing, it’s important to put money aside for maintenance in case anything goes wrong. Ask your real estate agent about getting a home warranty from the seller or builder to protect your investment.

Different Types of Houses

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There are many different home styles to choose from when you head out to search for your dream home. Here are some of the different home types as well as some pros and cons of each.

Single-family house. These homes are made for couples with kids and tend to be moderately sized. A single-family home has its own yard, and it’s typically located in a neighborhood alongside similar homes. This option is great for families or people who enjoy living near neighbors. Some single-family houses can be cramped, so check the size before you make an offer to make sure it has enough space for you.

Apartment. An apartment is usually rented, and it’s a good starting point for single people, young couples, and professionals. The downside to apartment living is that you’ll never gain any equity no matter how long you live there. On the plus side, the landlord or property manager handles all repairs and maintenance costs.

Condo. If you’re dreaming of condo living, it’s a good choice for those who prefer not to deal with landscaping and yard work. Condos are a good choice if you enjoy city living or want to be in the center of the action. Some condos charge for parking and will also charge additional association fees, so find out about these costs before you decide if it’s a good option for you.

Twin home. A twin home is similar to a duplex in that it’s two similar homes connected by a wall in the center. One main difference is that you’ll have ownership of the lot based on the lot lines, giving you a bit more resale value than a standard duplex. These homes are great if you don’t need a lot of room, but you’ll be forced to share a wall with your neighbors, and it can feel cramped if you prefer wide-open spaces and privacy.

Manufactured home. This type of home is an affordable way to own your own property, but you’ll also need to purchase or lease the land that it sits on. Manufactured homes are financed differently than traditional homes, and they generally lose their value rather than increase as time goes on.

Modular home. A modular home offers you the chance to customize your house at an affordable price. These homes are built following all local, state, and federal building codes and are constructed in a factory. Once the home is complete, it’s ready to move into. Modular homes appraise just like a stick-built home, and you’ll get higher quality living at a much cheaper cost.

Mobile home. Mobile homes are attached to a trailer and can be moved to different locations. These homes are perfect if you have a lot of land and want to live away from a major city or town. Mobile homes don’t usually gain value over time, but they can still be an affordable way to own property rather than rent.

Tiny home. If you’re looking to downsize, a tiny home is a great choice. These small houses can be built on a foundation or they can be towed by truck so you can live a nomadic lifestyle. While tiny homes are great for the environment, they can also feel quite cramped.

Floating home. For those who love the water, a floating home can be a dream come true. These houses typically sit right on top of the water and are attached to a dock to keep them in place. Floating homes are fun to live in, but they definitely require more maintenance than the average home that sits on land.

Mansion. If you have a big budget and want it all, a mansion might be right for you. These sprawling homes typically have a ton of square footage, beautiful landscaping, and high-end features and finishes. While mansion living is luxurious, it’s also quite expensive and requires much more maintenance and work to keep up than the average home.

Other Considerations

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Here are a few other considerations to keep in mind when you’re buying a new home.

Find a real estate agent. Make sure you hire a reputable real estate agent who knows your local market. They will be your guide when shopping for a home and will help you navigate things like inspections, negotiating with the seller, and closing.

Home inspection. Every home buyer should pay for a professional home inspection before making an offer. The inspection will help you find any red flags and will give you bargaining power if there are some items that need repair.

Neighborhood styles. Think about the perfect neighborhood before you shop for a new home. This can have a huge impact on how much you enjoy your home and your quality of life.

  • Urban. These neighborhoods are located in the center of a city and are usually close to public transportation, shopping, and restaurants.
  • Walkable. A walkable neighborhood is great if you have a dog or children. This neighborhood style is usually close to things like schools, libraries, or small stores and restaurants and is considered safe to walk during most hours of the day.
  • Cul-de-sac. A cul-de-sac is essentially a U-shaped “dead end” street. If you prefer privacy and don’t want to deal with a lot of traffic going by your home, it’s an excellent choice.
  • Retirement. Retirees may prefer a neighborhood specifically designated for people of retirement age and older. These neighborhoods usually provide amenities like tennis courts, walking trails, and gated security.
  • Rural. Living the quiet country life is a wonderful choice if you prefer to stay away from the hustle and bustle of a city. A rural neighborhood provides quiet living, but you’ll probably be further away from conveniences like grocery stores, schools, and hospitals.

From your budget and favorite type of neighborhood to the size and house style, keep all of these considerations in mind when you’re out hunting for the perfect home. Always hire a trusted real estate agent to help you go through the process of buying a home to ensure that everything goes smoothly. With a bit of advanced planning, you’ll find the perfect home of your dreams in no time.