Answers to Common Home Buying Questions in New Albany, OH
Buying a home in the New Albany area can be an exciting adventure for many families and young professionals. However, the process can be quite intricate at times and having the right information is key to successfully buying a home within your budget. Here are some answers to common questions asked by buyers:
What should I do Before Buying a Home?
Unless you have a large savings account to pay for your house in cash, you will likely be looking for a mortgage loan. In preparing for your loan application and home purchase, you should:
- Check your credit score – while some lenders will approve loans with lower credit scores, many prefer to see a score over 700 before they will give you a good interest rate.
- Keep saving money – lenders like to see healthy savings accounts and a sizeable down payment, ideally 20%, but many will accept less. You will also have a number of home buying and moving expenses to pay throughout the process.
- Get pre-qualified – This is usually a shorter application than for the final loan. This will give you a letter of pre-qualification, so that when you make an offer, your agent and the seller’s agent know that you are likely able to go through with the purchase.
- Research – research the neighborhoods in the area, possible lenders, and local interest rates and understand as much as you can about the housing market in the area before you begin.
How Much Can I Afford?
When deciding how much you can afford, consider that your housing costs should be no more than about a third of your income. In addition, keep in mind that there will be taxes and (unexpected) maintenance costs that you will need to pay as a homeowner. Be careful not to stretch your income so thin that you cannot afford anything other than your house and associated payments.
Why Should I Buy Instead of Renting?
Though buying has many advantages, here are a few of our favorite ones. Buying gives you more stability in that you don’t have to worry about what to do when the lease ends or whether your landlord decides to sell and give you 60 days notice. Depending on the home, you may have income opportunities through renting out a bedroom, basement or attic or even parking space. When you buy, your mortgage is like permanent “rent control” in that it will not increase yearly.
Lastly, each month you pay your mortgage payments, you build equity in your home. This, in return, builds its value, leaving you with a great asset to sell when the time comes.
How Do I Choose the Right Mortgage Loan?
There are different types of mortgages available, with the main differences being fixed vs. variable interest rates and length. The best choice depends on your personal circumstances. For example, if you plan to buy your home and live there for only a few years, an adjustable rate mortgage, which starts with a lower rate for a set number of years and then changes yearly after that might be perfect as you will pay less for the few years that you own the property. Speak with your mortgage lender to discuss your options.
What Should I Look for When Deciding on a Community?
Deciding the neighborhood or community that is right for you is not a small decision. Think about factors that matter most to you. Schools, public transportation, taxes, shopping, and other amenities are just a few. Go through this list to understand which are must haves and which are only nice-to-have, so that you can check off the items as you view potential homes.
How Do I Make the Right Offer on a Home?
Your real estate agent can be a great help in the initial offer. Most list prices are higher than the seller expects to get but your agent can help you identify similar or comparable homes in the area that have sold recently, so that you can determine a fair market value for the home. Even after the offer, some sellers may counter your offer, so don’t be surprised if there are a few negotiations before reaching a final price.
Buying a Home
We hope these points have given you a few things to consider as you begin your home purchase process. The process might seem a bit overwhelming but following these tips will help to smooth some of the bumps along the way and make it a little easier for you.