Before You Start Looking For a New Home
You can never be too prepared when it comes to what may be the largest financial transaction in your life. Before you even look at a property with a for sale sign on it, you should be focused on one thing: your finances.
Get Your Credit Score in Order
Your credit score is an important factor in getting a low interest rate for your new home. Credit scores range from the awesome 800 score to the “uh-oh” score of 300. The higher your credit score is, the lower your interest rate will be, which makes your mortgage payment smaller in the long run. If your credit score isn’t looking to hot (below 660), see if you can improve your finances and boost it up before securing an interest rate. (As long as your credit score is above 580, you can always try for an FHA loan which can help you save) If you’re looking to lower your credit score, it’s all about making payments on time and keeping your debt payments current. Take some time to set your financial rhythm before you go house hunting. Outside your credit score, make sure you’ve got a good amount of savings built up. Yes a mortgage is a loan, but it still requires a good chunk of change up front.
Save Up Some Money
Besides your credit score, make sure you’ve got a good amount of savings built up. Two of the largest items you’ll pay for will be your closing costs and your down payment. Closing costs is a general term for many of the services and fees you’ll have to pay when getting a mortgage: title fees, inspections, taxes and more are thrown into this. Your down payment is how much you pay upfront on the overall cost of your home – the remainder is your mortgage. The larger the down payment, the smaller the loan you’ll have to pay off. The recommended down payment size is 20% of the total cost of your home, but that’s not a required amount. It’s hard to give exact advice on savings for your down payment and closing costs, because the amount depends on what your home costs. Here’s what we can say: Have a good amount of money saved, so you have the upper hand when approaching these costs.
Know What You Can Afford
This is another page from the book of obvious-sounding tips, but know what you’re financially capable of before you start looking for a new home. Searching for a new home can be like ordering at a restaurant when you’re really hungry – it’s easy to overspend. Have some foresight when you start looking for homes. Figure out what you can realistically pay for your down payment and closing costs, and start searching for homes in zip codes that will accommodate your budget. There’s no point in touring 12-bedroom mansions if you’re nowhere near that income bracket.
Once You’ve Found Your New Home
Really Check it Out
Sure you’ve toured it, and you love this or that about your new home, but have you examined the often overlooked nooks and crannies? Have you quickly ran every faucet and showerhead to ensure they won’t be your first home renovation? Assuming you have a basement; how does it look? Does it look like it could flood? How about the windows? Can you handle a rough winter with them? Make sure your love for the new locale isn’t clouding your judgment on practical issues.
Are You in It for the Long Haul?
Again, this is to prevent you from making an impulsive decision based on the excitement of owning a new home. It’s a tall order, but really think about all of the changes your life could have while you’re living in this space, and if this home will accommodate your needs. Are you going to get married while you’re living here? If you are, will you have kids? Does the surrounding community seem like it’s getting better, or is it getting worse? Is this a city you want to live in at your current age? How about in 10, 15, or 30 years? It’s a little weird to get that introspective about your future, but it’s a conversation you need to have with yourself.
Once You’re Moving In
Don’t Try to Do Everything at Once
Moving into a new place is a marathon, not a sprint. After going through the massive effort of moving into a new place, odds are good that you’ll want to keep charging full steam ahead. Do yourself a favor: don’t. You’ll want to turn your house/condo/dwelling into something that feels like home as soon as you can to end the dread of being in transit, but don’t break your back in the process. It’s important you settle into your new home easily, and work things out in smart phases.
Unpack the Essentials First
Sure, you’re going to want to break out your hammock and set that up in the backyard as soon as you can. But do you have dishes unpacked yet? Channel you inner parent and make sure you have all the unpacking chores done before you start decorating your house with luxuries. Get your bed set up first! Even if you waste the day away afterwards, you’ll at least have a proper place to sleep. After that, unpack the essentials for your day-to-day life: clothes, toiletries, kitchen appliances, dishes, and so on and so forth. This way, the end of your unpacking will bring your favorite non-essential items to light: hammocks, video games and kegerators will be yours to settle in!
Give yourself a break! You’ve accomplished one of the most loathsome tasks in the modern world: moving all of your earthly possessions from one location to another. Crack open a refreshing beverage of your choice, take a nice walk, or do whatever tickles your fancy. Moving into a new place is always an adjustment period, so get comfy in the way that only makes sense to you.
Any other moving tips we may have missed? Please comment below if you have any questions or additions to this list!
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