Buying a home is no small investment. In fact, the choice you make now has the potential to affect your life for the next several decades. It’s not just about finding a good house for you and your family, it’s about making sound financial decisions and thinking about the future.
We’re not trying to deter you from purchasing your next home, as it can be an incredibly rewarding investment. However, there are definitely some questions to ask before buying a house to make sure you’re making the right choice.
We’re here to give you a little guidance. Keep reading for the top seven things to know before buying a home or making an offer.
1. How Much Can I Afford?
Obviously, one of the most important questions to ask before buying a house is whether or not you can afford it. However, we’re not just talking about getting approved for the home loan, you also need to make sure it works with your monthly cash flow.
A lot of people in this country live paycheck to paycheck every month, struggling to get buy. This happens because they borrow too much money by taking out loans and using credit cards. Eventually, the collective bills add up and smother their bank accounts.
Before going all-in on a house, make sure you have plenty of room in your budget for the mortgage payments and all the other expenses involved in homeownership. These include:
- Homeowner’s insurance
- Property taxes
- Utilities (electric, gas, water, waste removal, etc.)
- Services (cable, internet, phone)
- HOA fees (if applicable)
- Regular home maintenance and repairs
- And more
Account for all of these extra costs while planning your budget and deciding on your price range.
2. Does My Credit Check Out?
Next, you need to make sure you are eligible for the home or price range you desire. Just because you can afford a certain monthly allowance, it doesn’t mean you have the credit score necessary to get approved for a loan. This is one of the most essential things to know before buying a home or even starting the shopping process.
Talk to your bank to get pre-approved for a mortgage. They’ll let you know exactly how much money you can get approved for and what your terms and interest rates will be. If your credit score is too low, it may be worthwhile to spend six months boosting your credit score before applying for a mortgage.
3. What Kind of Loan Should I Get?
Before buying a house, you also need to decide what type of home loan you should get. You have several options here.
If you or your spouse served in the military, you will be eligible for a VA loan. VA loans don’t require a downpayment and come with competitively low-interest rates.
There are also FHA loans, which are government-backed loans designed for people with lower credit scores. FHA loans can be obtained with as little as 3.5% down, which is low in terms of down payments.
Conventional home loans typically have better interest rates than FHA loans but are not backed by the government. These loans call for a 20% down payment. For example, a home that costs $200,000 would require a $40,000 down payment.
4. What Are My Top Priorities?
“What am I looking for in a home?” is one of the most fundamental questions to ask before buying a house. What are your top priorities? What type of home are you looking for?
If you have a growing family, you need to buy a home that is big enough to accommodate everyone in your household. You also need to consider amenities. For example, do you want a backyard pool, fire pit, patio, or deck?
If you’re looking for a home outside of the city, the home may have a septic tank. If this is the case, you need to make sure you understand septic tank maintenance. You may also desire a home that’s off-grid and powered by solar energy.
5. Is the House in the Right Location?
Before buying a house, do a little research into its location. How far is it away from your work? Are there any nearby parks or playgrounds?
Is the home in a nice, safe neighborhood? If you have kids, find out what school district the neighborhood falls under.
Additionally, is the home in a neighborhood that’s growing or in decline? Is the house likely to increase in value or decrease in value? These are important questions to ask a realtor who should know everything about the home and the surrounding area.
6. Has the Home Been Inspected and Appraised?
Has the home been professionally inspected? If so, can you see the inspection report? Were there any major issues?
These are some of the most practical questions to ask before buying a house. While the buyer typically pays for the inspection, it’s possible the seller or another buyer has already had the home inspected. In this case, you can either go off the original report or hire your own house inspector to get a second opinion.
Additionally, you need to make sure the home has been appraised. A home appraiser should come to assess the home and make sure the seller is asking a fair price. If the appraisal comes in low, you may have the leverage needed to get a better deal.
7. Is the Seller Willing to Negotiate?
Finally, one of the best questions for realtors is “Can we negotiate with the seller?”
Real estate transactions are almost always negotiable. Occasionally, sellers will be unwilling to negotiate and you’ll have to decide if you want to pay the asking price. However, a realtor can help you negotiate with most sellers.
Keep in mind, there are other things to negotiate aside from the price. For example, you can ask the seller to pay for closing costs, realtor fees, updates, or repairs. You could also request that they leave behind appliances, furniture, decor, etc.
Do You Have the Answers to the Most Important Questions to Ask Before Buying a House?
Are you ready to buy your next home? Make sure you know the most important questions to ask before buying a house when talking to the realtor or seller. Remember, this is a big commitment.
And if you need more advice about real estate, finances, or business, be sure to explore the rest of our blog before you go. Our website was created to provide as much information as possible for people just like you.