Buying a house is a big step – Many people realize that much larger. It often involves a host of expenses and responsibilities for first-time buyers that they never dreamed of, Besides being the largest financial activity up to that point in their entire lives. It has been said that buying a house is like getting married because you’re going to be stuck with your purchase for the next 15 to 30 years (and the stuff you don’t like about it that you learned after the fact). So it’s vital that you do all you can to make a wise buy. A good place to start would be to ask yourself these five questions before you buy a house in Crown Point.
1. What Are My Real Reasons for Buying a House?
Perhaps this issue could be the most critical to make sure that you later regret your purchase. Like marriage, knowing why you want to buy a house in Crown Point and setting realistic expectations is key to long-term satisfaction.
According to a report published in April 2019, here’s what can happen if you don’t understand the reasons and goals for buying: “Fifty-one percent of millennials regret buying their houses. Perhaps their greatest regret is that their monthly mortgage payments are too high, the house needs too much upkeep, and since the purchase the house has depreciated too much in value.” And yet another study showed that “63 percent of the surveyed millennial homeowners have the guilt of the buyer. The biggest disappointment in this case. Was an unforeseen cost of repairs or hidden costs.”
Therefore, most real estate experts advise you to do your research to ensure that your motives for buying a house are really good evidence-based reasons. If you think buying is cheaper than renting, for instance, you might be in for a surprise.
2. Can I Truly Afford It?
Lending standards have tightened quite a bit since the recession. You’re probably going to need a bigger down payment than you would have a couple of years ago. And then there are all the maintenance costs then “hidden” expenditures that we have just listed–those that make so many millennials regret buying a house.
Your down payment target should be as close as possible to 20 percent of the purchase price. If you can really get that down payment, you’re going to be “more appealing to borrowers and save money because you don’t have to pay for Private Mortgage Insurance (PMI).
Instead, after determining how much down payment you can afford, you will have to assess a reasonable range of monthly mortgage payments before you buy a house in Crown Point. Buyers often have difficulty investing the full amount for which they have been accepted and then having trouble making the monthly mortgage payment. To assess how much home you can truly afford, you can use one of the many online mortgage calculators.
But as a homeowner, the mortgage payment is just the start of your expenses. You would also have to factor the cost of repair and maintenance affordability, insurance for homeowners, property taxes, and fees for HOA. And this means that in order to cover these expenses you will need some reserve funds.
3. What Kind of Mortgage Loan is Best for Me?
The next question you have to ask yourself before you buy a house in Crown Point is about financing. The first factor is the duration of the loan, typically 15 or 30 years. The longer the term, the less you pay per month, but over the life of the loan, you will wind up paying much more interest.
The next distinction is between a mortgage with a fixed rate and an adjustable mortgage rate. As the name suggests, a fixed rate mortgage has an interest rate that remains the same throughout the life of the loan, usually allowing for better planning and budgeting. Starting with a low interest rate, an adjustable mortgage rate increases at set intervals.
Immovable finance experts suggest that first-time buyers should be skeptical about adjustable mortgages. The interest rate will rise and the expenses will increase, and then you may find it hard to keep up. Once your rate changes kick in, your equity may not grow fast enough to allow you to refinance.
4. Do I Really Need an Inspection?
When you don’t want any costly surprises down the road, make sure that all tests are passed by the house. If you don’t have an inspection, after purchasing a house in Crown Point, you might find out that you have to pay out of your own pocket for some extremely expensive repairs. Each penny will be worth the relatively small cost of an inspection – even if you’re doing major renovations because you’re going to know what’s ahead.
One precautionary measure you should take in the purchase contract is to have an inspection contingency. If the house does not pass the inspection, this provision would allow you to make repairs or even cancel the sale. Your agent will assist you in developing watertight contingencies for inspection to ensure you are fully protected.
5. Why Do I Need a Real Estate Agent?
Until you buy a house in Crown Point, you really should employ a professional local agent until you take the first step towards that goal. An agent can make all the difference in making the house search and purchase process go smoothly. Your agent is going to understand what you want and need and then use their local market knowledge to help you achieve it.