Home Buying Tips to Keep in Mind
November 29, 2016
There are no secrets to buying a home. But if you haven’t purchased a home in decades, there may be ideas and principles that you have forgotten. Knowing the right approach and the right steps to take will take a lot of stress out of the effort.
Know Your Assets and Look Smart
It is important that you know exactly where you stand financially and what you can afford, both in the near and long-term. Familiarize yourself with all your assets and how you might use them to greatest advantage. Keep in mind that a 20% down payment will save you from paying private mortgage insurance, and before you retire, you may want to have your retirement property paid off to avoid this major budget expense.
Home Loan Pre-Consultation
Given the changes in your financial situation which comes with retirement, it makes sense to consult with lenders before you start looking at properties, so you know the size of loan for which you are eligible. This foresight will also offer the opportunity to shop around for the best mortgage deal, including interest rates.
Getting your home loan pre-approved means that a lender has reviewed your financial situation, and told you what you can afford and the size of loan to which you are entitled. Pre-approval will save you from looking at properties that may be outside your price range.
Avoid Timing the Market
Not unlike the stock market, trying to time the housing market is nearly impossible. The best time to buy is when you are ready to buy and when you find the right property. Especially in this real estate climate, with rental rates rising and interest rates still very low, there may be no better time to buy. Still, you need to be sure that you are buying at the right time for you.
Love Your House—But Use Common Sense
If you buy a house based solely on your emotional reaction, you may make some poor financial decisions. Yes, you should love what you are going to buy, but don’t let that love overtake all other considerations. Avoid obsessions and tunnel vision, and make sure that you have investigated all the relevant variables such as location, neighborhood, and immediate and nearby amenities.
The Right Size Matters
When buying a retirement property, it often makes sense to trade down in size, since the theory goes that retirees should need less space. Just make sure that you understand all your space variables in advance. Make sure you have informed answers to such questions as: What size house do you and your spouse need? Is the property just for the two of you, or are you expecting regular visitors who will need their own living space? How much personal space is needed by you and your spouse?
If you can, you should experience different retirement properties before you make a purchase. We invite you to visit some of our outstanding 55 plus communities in Delaware and find out why this state is one of the best places to retire.