The move from renting to buying a home is a big transition. Renters can take a lot of things for granted, like a maintenance staff that fixes their appliances and repairs the walls, landscapers who take care of all the grass and gardens, and a clerk staff that handles things like property tax and insurance. It’s a lot to take in, and many new homebuyers in Sacramento, CA and elsewhere make a few mistakes during this transition.
Still, one advantage today’s new homebuyers have is the fact that they aren’t the first ones. Plenty of other people have been in that situation, and they can pass on their advice and experiences to the next generation of homeowners. The following advice isn’t comprehensive, but it is a good place to start.
Home Ownership Costs Only Start With The Mortgage
The price of a house is easily the biggest single number you’ll ever pay (at least until the next house), but it’s not the only number you have to worry about. There’s the property tax that’s based on the home’s value, homeowner’s insurance premiums, and utilities like electricity, gas, water, garbage disposal, and cable service. Also, as a Sacramento, CA homeowner you’ll be responsible for all repair costs. That includes replacing aging roof tiles and fixing cracks in the foundation.
Don’t Spend Everything On The Loan
The reason you stash money in a savings account is so it’s ready to use whenever you need it. Retirement funds are long-term investments, stocks and bonds need to be sold before you can spend the money, but money in a savings account is as liquid as it gets. However, it’s not liquid if you put your entire savings into a down payment for your mortgage. Doing that can certainly lower your monthly payments, but remember to leave something behind for other emergencies.
Don’t Be Too Eager
When you’re getting a house and taking out a mortgage to pay for it, it’s important to do everything in the right order. That way the house won’t slip away from you and you won’t be left with a big loan and nothing to use it on.
- Get pre-qualified for a loan before you start looking for a house. It can be very frustrating to find the perfect place only to discover that you can’t find a bank that will lend you enough money to buy it—at least not on terms you can afford. Know your budget ahead of time so you know your price range when you look at houses.
- Wait for the deal to close before moving on. Your lender will check your credit report right before the deal officially closes, and if your credit score dropped thanks to new loans; they may demand new terms or cancel the deal completely.
You should also make sure you get some professionals on your side to help you find a good loan and a good property. In Sacramento, CA you can count on us to walk you through the loan process. Whether you’re a first-timer or a career house flipper, it always helps to have a professional on your side.