Do you have a new job? Are you expecting an extension in your family? There are several reasons to move to a new home. However, the last thing that you would want in a real estate transaction is to have regretful financial surprises. The process of buying a new home starts way before you step out to find the right home for your family. It starts with evaluating your financial status, arranging for the down payment, and ensuring that you have the right credit score to get sufficient funds.
If you are planning for a new home, make sure to follow these steps before starting the search process.
This is the first step towards preparing for a new home. You need to evaluate your credit score and review any credit mistakes in the last few years. In case your credit scores are not at par for favorable interest rates, devise a strategy to improve your credit scores and start working on it.
Many people undermine the changes in their financial life because of a new house. All they consider is the increase in mortgage payments whereas the real financial picture is quite intensive.
You need to understand your profit on current home sale, cost of insurance for the new property, funds for closing the transaction, new utility costs, and your new mortgage payment. It could be a bit overwhelming to do it all on your own so consult experts. In addition to a financial planner and mortgage broker, you should consult a tax expert to understand the implications of current sale on your tax bill.
Every potential homebuyer would conduct home inspection so it makes complete sense to do it beforehand. You will identify any potential damages or pest infestations in your property much before the house is on the market. It will give you sufficient time to fix it or do the necessary repairs. Find out any outstanding HOA issues on your house and mention them in HOA disclosures.
It might sound weird but you might have to put in more money in your house to make some profit. Prepare a budget that involves all the closing costs of the transaction and arrange for necessary credit to pay them.
There are a dozen more expenses to add to this list and you can seek help from your real estate agent.