Smart Tips for Homebuyers

Especially if you're a first-time homebuyer, the homebuying process can seem overwhelming. Here are five simple tips to help you make your homebuying experience a good one.

Don't make an offer until you're pre-approved. You can easily get pre-approved for a loan once you have your competitive mortgage offers. Especially if you're buying in a competitive housing market, your purchase offer should contain as few conditions as possible. Some sellers will take a lower offer rather than deal with buyers who aren't pre-approved for financing to avoid the risk. After you apply for competitive mortgage offers, look into getting a pre-approval letter from your lender of choice.
Know when to call it quits. Making decisions based on emotion instead of reason will only hurt you in the homebuying process. Emotional decisions happen when you get too attached to a house and end up overpaying as a result. Years later, the infatuation with the house will have worn off, but the payments will remain. Similarly, your competitive instincts might lead you into a bidding war where you overpay out of a need for victory.
Start saving money for closing costs. Even with competitive mortgage offers with reasonable terms, closing costs can be considerable. Closing costs can amount to 2%-6% of your total loan amount, so make sure you have money set aside for this purpose. When you receive competitive mortgage offers, you can always ask each lender for a good faith estimate of closing costs so you know what to expect.
Time your moving date with the day you take possession of your new home. When you're buying your home, try to time your move-in date to coincide with the move-out date from your present home. If you have a gap between the dates, you will end up having to move twice, which is an incredible hassle. Not to mention you will have to find a place to live and a place to store all of your belongings temporarily.
Never skip a home inspection. Some competitive mortgage offers will require a home inspection and/or appraisal before finalizing the loan. Even if your mortgage does not require this, always make your offer to buy a house contingent upon a home inspection. The inspection can alert you to any costly repairs the home might need before it's too late.