10 things first time buyers should know
So you’re planning to buy your first home? Congratulations! You are about to embark on the dream of a lifetime. Make sure that the dream doesn’t turn into a nightmare by consulting the professionals, Madison realtors, for help every step of the way. These days the Madison real estate market is in a state of flux. It is important to have basic information on hand, about yourself, about homes and about financial facts and figures. Here is a list of ten things all first time home buyers should know.
1. Your budget – Your budget is the most important factor in determining what and where you can buy. If you are counting on an inheritance or gift from family to make a down payment on a piece of Madison real estate, be sure that money is actually in your bank account before you commit to a house buying deal. How much mortgage can you afford? Many Madison realtors are qualified to help you figure this out. Pre-approval for mortgage funding will put you in a stronger position to buy.
2. Costs – Be informed about the true total cost of buying. Generally this is the price negotiated with the seller, plus closing costs, plus private mortgage insurance (mandatory if you are putting less than twenty percent down), plus repairs and maintenance, plus any extras such as condo fees and parking charges.
3. Financial help – Find out what financial assistance you may be entitled to, for example, tax credits.
4. Needs and priorities – Each individual or family has strong opinions about what they want from a home. For example, for some a pool is a must, while for others a home office takes priority.
5. Neighborhoods – Do your homework to find out whether this is a neighborhood likely to go up in value. Is it safe and quiet? Does it have a solid infrastructure of services and facilities? Who else is buying there?
6. Renovation – Would you like to make over a house to your personal taste? Or do you want to just bring your suitcases and move right in? Investigate the feasibility and cost of any renovations you would like, and consider where you will live while the work is going on.
7. Potential – It’s important to look at the house that’s in front of you … and then look beyond. You can always take down that ugly wallpaper. Other faults, such as lack of sunlight, may be harder to fix.
Cautions for first time buyers
8. Prepayment penalty – Try to avoid a clause in your loan contract which would penalize you for paying your mortgage in a shorter period than anticipated.
9. Overstretching – Keep some leeway in case your financial situation changes. Don’t overly stretch your finances in order to purchase that prize example of Madison real estate, no matter how tempting.
10. Home inspection – All Madison realtors will tell that a professional home inspection is a must before you sign a purchase contract. The inspector will detail any structural problems, and the cost to fix them.