Many potential homeowners crunch the numbers to see how their current monthly rent or mortgage stacks up to their prospective future monthly mortgage payment. While this is a good starting point, people often neglect to factor in the other costs involved in buying and maintaining a home. These small details can cost you thousands. We have compiled a list of tips that could save you time and money when planning to buy a new home.
1. Get into the Market Now
In San Antonio right now, there are 8,500 homes on the market. In 2011, there were 11,000. Because there are fewer homes available, it is a profitable time for home sellers to put their home on the market. Likewise, homebuyers who invest now will capitalize on the improving San Antonio housing market. According to KW San Antonio real estate expert Cathy Naiser, “some will miss this market because they were waiting for the ‘perfect home.’ If t he perfect home does exist, 25 other buyers will find it too and there will be a huge feeding frenzy, driving the price up higher and higher.”
Instead, Naiser suggests homebuyers find a home that meets most of their needs. Get into the market now so your new home can start appreciating in value.
2. Look at ALL the expenses when you are budgeting for the house
When budgeting for the house, don't stop with principal, interest, taxes, and insurance; add in utilities, cost of commuting and upgrades. Call the utility companies that service the house you are considering and ask for an estimate of what the cost will be. If you are moving further away from the places you frequently visit, how much more will you spend on gas? Take all these expenses into account when allocating a budget for a new home.
3. Get Pre-Approved for Your Home Loan
There’s a big difference between being pre-qualified and having a pre-approved mortgage. Pre-qualified applicants are often given a wide range of loan amounts to work within. However, getting pre-approved means a lender has looked at all of your financial information and they’ve let you know exactly how much you can afford and how much they will lend you. Gaining pre-approval will give you a better idea of how much you can spend on a home, so you can save time looking only at homes you know you can afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: learn about junk fees, processing fees or points and make sure there are no hidden costs in the loan.
4. Check Local Property Tax
Usually levied on the state and city level, property taxes pay for local services like public schools, roadways and sewers. The local tax office will assess the value of your home and correlate the taxes to the value. Be sure to watch out for changing boundary lines that could affect your taxes. Likewise, some neighborhood-cities, like Alamo Heights and Castle Hills, require their residents to pay additional property taxes.
Real Estate Expert Tip: Thinking of purchasing a home on the outskirts of San Antonio? San Antonio is expanding city boundaries, so that “country” house, may soon be within city limits, which will raise your taxes.
5. Look at the Homeowners Association Contract
Be sure to read the fine print in your HOA contract. Look out for barriers to home business, restrictions on animals, nighttime noise rules, limitations on the number of home renters and patio prohibitions that you may not have considered previously. If your HOA contract inhibits your lifestyle or your business plans for the future, it may cost you more than you had expected.
6. Insurance: Do your Research
Homeowners’ insurance is required because you are a liability to your lender should your house go up in flames and the property becomes worthless. The cost for insurance varies widely, and depends largely on where you live and the value of your home. There are also added costs if you live in an area prone to flooding or other natural disasters. Don’t skimp on time finding the cheapest, most valuable insurance for your home. This can save you money in the long run.
7. There Are No Stupid Questions
Before putting in an offer, make sure you ask your realtor as many questions as possible — and get important answers in writing. Nothing is too silly. Making sure that you have a realtor you can trust is imperative.
“Anyone can take a buyer out and show a home. It takes a great agent to really make sure each buyer is remembering the factors that are important for them,” says Naiser.
Buying a new home is one of the biggest purchases of your life. You don’t want to miss something seemingly small that could cost you tons of money in the future.