Congratulations on starting the process of buying a home! House hunting can be such a fun adventure but can also become stressful if you’re not prepared for a few things that will pop up. Banterra Bank wants to offer this home buying 101 guide so that you can be fully prepared before you find your dream home.
Know How Much House You Can Afford
You will want to go through your current loans, monthly bills, monthly expenses, future expenses/bills and so on. Calculate all of that up and compare it to you and/or your partner’s salary. This will help you know how much home you can actually afford to be able to still live comfortably. You will also want to get an idea of how much the taxes and insurance will be on a home in your price range– both of those fees will need to be added to your monthly cost. Your insurance agent can give you a good idea of what to expect, but your lender or real estate agent can also give you some guidance on this.
Still not sure how much home you can afford? One of our Banterra Loan Officers can help you with that decision.
Have A Down Payment Saved
You can still buy a home without having a 20% down payment, but if you do, there will be other fees associated such as private mortgage insurance (or PMI) that you would have to pay. There are several loan options that will let you finance a home with low or even no down payment, but the more you can put down, the lower your payment will be. Talk with your bank to know what your options are and how much those fees may be, but if you do put 20% down, then you can avoid those fees altogether! That’s why it’s important to start saving up for that down payment if you know you are wanting to buy a home.
Get Pre‐Qualified
With today’s low interest rates, the real estate market is very competitive and some sellers may not even accept your offer if you can’t prove the bank said you can afford a home within that price range. We wouldn’t want you to miss out on your dream home, so be sure to talk to your bank to get a letter showing your pre‐approval or prequalification. Banterra Bank offers free pre‐qualification online!
Remember Closing Costs
On top of your down payment, you will also have upfront costs for closing. Closing costs cover costs for things like your appraisal and title insurance, but also your first year’s insurance and setting up an escrow account to pay your taxes and insurance.
This amount can vary quite a bit based on the price of home you are buying, but if you can’t negotiate for the seller to pay these costs, you’ll need to have the cash on hand these costs as well. We have low closing costs, so be sure to check out all of our mortgage loan options!
Think About Selling Your Home
If you have a home to sell, the market is hot right now, so while house hunting, you’ll also want to focus on selling your house as well. Whether you decide to use a realtor or not, there are a few things you’ll want to get lined up so you can easily sell your home.
- Make your home presentable – Get rid of clutter, deep clean and fix anything that is broken.
- Decide on using a real estate company or selling by owner – While you will have to pay the real estate agent a fee for listing and selling your home, real estate agents have the ability to better market your home, have knowledge of the housing market in your area, and can help navigate you through the selling process. This often leads to more money in your pocket. If you do decide to sell your home on your own, you may need to contact an attorney to help complete a purchase agreement between you and your buyer.
- Remember that if your buyer has a real estate agent and you don’t, you may have to pay some real estate agent fees, so that’s something to consider when coming to an agreement on purchase price.
We want your home buying experience to be as simple as possible. By following the above tips, you’ll be in a great position for buying your first or next home! If you have any questions, please contact us about our mortgage options. We would be happy to be your trusted lender.
May 17, 2021 by Banterra Bank
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