Chris Budz Realty Executives Elite | Homer Glen Realtor
While buying a Homer Glen home is a big decision, there are also lots of small decisions to make along the way to homeownership. To help you navigate the process, we’ve gathered suggestions for avoiding some of the most common mistakes.
- Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.
- Think long-term and think re-sale
Are you planning to have kids? Will you be taking care of elderly relatives? You might be planning to live in your first home for only a few years. In that case, who is your target audience when it comes time to sell the Homer Glen house? If you buy a house in a very bad school district or a house on a very busy street, when you are ready to sell the house, most families with children will be out of your list of potential buyers.
- Check your credit
The homebuyer’s credit score is among the most important factors when it comes to qualifying for a loan these days.
“In addition, the standards are higher in terms of what score you need and how it affects the cost of the loan,” says Mike Winesburg, formerly a mortgage planner with McKinley Carter Wealth Services in Wheeling, West Virginia.
Scour the reports for mistakes, unpaid accounts or collection accounts.
Just because you pay everything on time every month doesn’t mean your credit is stellar, however. The amount of credit you’re using relative to your available credit limit, or your credit utilization ratio, can sink a credit score.
The lower the utilization rate, the higher your score will be. Ideally, first-time homebuyers would have a lot of credit available, with less than a third of it used.
Repairing damaged credit takes time — and money, if you owe more than lenders would prefer to see relative to your income. If you think your credit may need work, begin the repair process at least 6 months before shopping for a home.
- Budget for private mortgage insurance.
For conventional financing, this is typically necessary if you don’t put down at least a 20% down payment when you buy your home. If that’s the case for you, you will likely need to pay private mortgage insurance (or PMI). Make sure you know how much this cost will be and factor it into your monthly home payment budget.
- Bigger Isn’t Always Better
Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is usually not better when it comes to houses. There’s an old adage in real estate that says don’t buy the biggest, best house on the block. The largest house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, your appreciation is going to be limited. Sometimes it is best to is buy the worst house on the block, because the worst house per square foot always trades for more than the biggest house.
- Ask for the homeowners association contract before you make a decision
Our long term plan is to rent out the house, if and when we move away. With this in mind, once we identified the neighborhood we found most desirable, I asked for a copy of the HOA contract after going to an open house in the area. It turned out that none of the houses in that neighborhood could be rented out. If you are buying a house that is part of an HOA, it is absolutely essential to read the HOA contract before you do anything else.
- Don’t forget miscellaneous expenses.
Be sure to budget for moving expenses, as well as additional maintenance costs. Newer homes tend to need less maintenance than older ones, but all homes require upkeep. If you’re considering a condo or a home with a homeowners association (HOA), remember to include HOA dues in your budget. In addition, keep in mind that you should have an “emergency fund” on hand to prepare for any unexpected changes in your income (like reduction in your wages) or unexpected expenses (like medical bills).
No matter if you’re planning on selling your Homer Glen real estate or buy a home in, or near Homer Glen, you’ll want the best help available. Contact Chris Budz, Homer Glen’s smart choice for all of your real estate needs. Chris is the experienced Homer Glen real estate agent with the knowledge it takes to help you every step of the way.