Bill Mamak's Blog
The First Time Home Buyer's Checklist:
- I know where I want to live. Determining the location of your home is one of the most important factors that goes into home buying. Most decisions are influenced by your job/career, but things like family, friends and weather are all important things to consider. Aside from knowing where you want to live, you'll also need to know how long you want to stay. As a general rule, if you don't plan on staying in your home for at least 5-8 years it could be cheaper and easier to rent until you find somewhere you'd like to settle in.
- I have my finances under control. You don't need to be wealthy to buy a home, but you do need to have a strong understanding of your personal finances. In a spreadsheet, write down your total savings, monthly income and monthly expenses (including groceries, transportation, bills, and loans). Find out what type of mortgage and downpayment you can afford at your income level.
- My income is dependable. When you apply for a home loan the bank will look into this for you. But you should also want to make sure you can continue to afford your mortgage payments. How dependable is your job? Are there a lot of job opportunities in your field and in your area? These are all questions that help you determine the stability of your income.
- I have a good credit score. Your credit will be a big factor in getting approved for a home loan. Building credit seems complicated but it's based on four main things: paying bills on time, keeping balances relatively low, having a long record of repayment, and not opening several new cards or taking on multiple loans in a short period of time.
- I'm pre-approved for a loan. Getting pre-approved isn't mandatory, but it offers many benefits. First, it shows lenders that you are a safe person to loan money to. Second, it will give you insight into what banks think of your finances and will give you an idea of what price range you can safely buy in.
- I'm prepared for the responsibilities of owning a home and willing to learn. If you're handy around the house and can fix anything, that's great. What's more important, however, is that you have the time and willingness to learn new skills that will help you become a good homeowner.
There are countless reasons a homeowner might want to sell their home and buy another. Some want to move for a change of scenery or to relocate for work. Others are parents with a recently empty nest who want to downsize to something more affordable that meets their needs.
The good news for second time homebuyers is that you already have an idea of what to expect when buying a home. The research, paperwork, disappointments, and delays that come with buying a home can all be prepared for. However, if you have the burden of selling your old home, finding a temporary place to live, and then moving into a new one, your responsibilities can be doubled or tripled.
In this guide, we’ll go over how to prepare for selling your old home and moving into the new one. We’ll cover some common mistakes and offer some advice to keep you sane throughout this daunting (but exciting!) process.
Buying or selling first
For most homeowners, selling first makes the most sense financially. Holding onto a second house often means having to make two mortgage payments at once. Similarly, selling first will give you a much clearer idea of your budget for your new home.
Depending on market conditions, your home may or may not sell for as much as you were hoping. It’s important to keep this in mind before signing onto a new mortgage.
Once you sell your home, you’ll have to work out living and storage arrangements until you are ready to move into your new home. It may seem easy at first--just rent for a couple months until your move-in date, right? It isn’t always that simple, however, as deals can sometimes fall through and you can find yourself with a move-out date from your own home without having finalized a deal on your new home. Because of this, many homeowners elect to may their current mortgage for an extra month or two until they can move in to their new home.
Research your options for short-term living and storage in your area. See if you can work with moving companies who will give you a discount for helping you move twice; once to the storage facility and again to your new home.
One way around this is to time your move out and move-in dates so that you don’t have to worry about storage. Some homebuyers will even move into the new home before officially closing on the home (i.e., take possession before closing). While this may be convenient, it can also be dangerous for the buyer and the seller.
Keeping track of all this information can be difficult, so don’t be afraid to keep a daily list or planner of the things you need to take care of, and never be afraid to reach out to your real estate agent who will often be able to advise you on the best way to make your move as smooth a process as possible.