home ownership

4 things you need to know about buying a home

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It’s almost spring and that means people all around the country are spending their weekends visiting other people’s homes in hopes of finding a gem for their new abode.  Are you one of them?  Spring is a great time to look for a new home because spring fever has us itching to get outside and spring cleaning has us wanting change.

If you’re shopping for a new home this year keep these four tips in mind:

A real estate agent may be worth it

I know some people think hiring a real estate agent isn’t worth the cost but trust me when I say it can save you a lot of time.  I for one like researching online to find the best of whatever it is I need but I just don’t have time.

Real estate agents know other real estate agents and they know as soon a property is coming on the market, that in itself is worth the cost.  Oh and I should mention that it’s not the home buyer who pays the real estate agent commission fee, it’s the seller.  So if you’re looking for a home, look for a real estate agent first.

Always stick to your budget

I can’t stress this enough.  There is absolutely no reason to go over budget when it comes to buying a home because there will always be another home out there with another seller willing to negotiate the price.

You may not find your dream home with all the amenities on your wish list but maybe that wasn’t a realistic goal for your budget.  Visit your bank, get a preapproval to find out how much you can afford and stick to that number.  Trust me an extra $10,000 might seem like peanuts in comparison to your total mortgage price, but amortized over 30 years it’s a lot of money.

Talk with your bank

If you’re buying your first home talk to your bank.  They’re experts, banks help clients buy and sell homes every day.  Your bank will guide you through the home buying process and even recommend a real estate agent and a notary to make your process even easier.

At this point in the game your bank is here to help, you’ll get to the nitty gritty when it’s time to negotiate your mortgage rate.

Shop for a mortgage rate

You’ll go to your bank for a pre approval when you start shopping for your home and they’ll give you an amount they’re willing to lend, interest rates won’t be discussed yet.  When you find the home you want to buy and you’re ready to make an offer, this is when the negotiations will start.   If you take anything away from this today it’s to always negotiate your mortgage rate.

When you walk in to your bank the mortgage representative will tell you that they are offering the best rate possible – but that’s never true.  Banks can always negotiate rates even if it’s a 0.10% discount.  Never accept the first interest rate offer.

If you’re bank can’t offer you a lower rate don’t be afraid to shop around.  Go to another bank, find a mortgage broker or use a comparison website like Lowest Rates.  You can also negotiate other options in your mortgage deal such as the bank paying for home inspection fees or the notary costs.  Always keep in mind they want your business and don’t be afraid to walk away.

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About the author

TK

TK is a Certified Financial Planner with over 15 years of experience in the banking industry. She started blogging in 2009 after the market crash. TK enjoys helping people plan their retirement, pay off debt, invest wisely, live on a budget and enjoy happy financial lives. You can see what she's up to on Twitter @TahnyaKristina.

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