If you are preparing to buy a house, you’ve probably researched the home-buying process and what you can expect. But there may be a few tips you might have missed. Here are the five things that you should absolutely know before buying a home:
- You are not going to get the baseline rate set by the Federal Reserve. This is a baseline, remember. Many buyers will watch the fluctuations of this baseline and buy only when they think that rate is favorable. Here’s why this is an issue: your rate is based on a range of different variables (your credit score, for instance). The Federal Reserve baseline is another of those variables.
- You probably do not need as much for your down payment as you think. In the past, you might have needed 20% of the house’s total price as your down payment. Today, you could pay as little as 3%, depending on what type of loan you choose and what your lender expects.
- Set aside your down payment as early as possible. Even if the seller is not particularly motivated to sell, once they accept your offer, they are probably going to want their deposit as quickly as possible. This will usually come out of your down payment. You want to have this money on hand so that when the seller accepts, you can make the payment without delay.
- Get an inspection, even if it is not required. Many buyers will skip the home inspection if it is not absolutely required by law or regulations. Get one anyway. This will make sure that the seller has left the home in the condition that you expected. It also gives them the opportunity to fix any issues that should be remedied before you move in.
- Ask about seller concessions. If a seller is being stubborn about their price, there are ways that you can get them to compromise. If you are willing to meet their price, even if it is higher than what you wanted to pay originally, ask the seller if they are willing to pay your prepaid interest points or your insurance fees.