Home Buying Tips

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Buying your home "by owner" can be a great way to save money on your next home purchase. We offer regularly-updated answers to common questions from home-buyers like you. Our goal at AreaByOwner.com is to simplify your next home purchase and take the worry out of purchasing directly from another owner.

One of the most common mistakes by homebuyers is getting in over their heads with high mortgage payments. But your mortgage isn't the only thing to take into consideration when figuring out your target price range. Some common "hidden costs" of purchasing or owning a home are listed below to start to get you thinking:

• Homeowners Insurance
• Flood Insurance (check with your local municipality)
• Real Estate Taxes
• Closing Fees and PMI
• Utility Costs (gas, water, electric)
• Yard Maintenance

And even if you have all of the costs associated with your home covered, there are always other expenses in your life as well.  It is always a good idea to visit a local lender to determine your credit status, familiarize yourself with current interest rates and mortgage options, and learn other factors that may impact the total cost of your home purchase.

You may also find a Home Affordability Calculator a great first step to seeing just what you can (and cannot) afford.

TIP 2: Shop For a Loan and Know the Best Type For You

When starting to look for a home to buy, it is always a good idea to get your financing in order.  Pre-approved by a lender lets you know exactly what you can afford and the associate costs involved.  Here are a few quick tips when shopping for a loan:

• Don't be afraid to shop around
  Visit with several lenders from various sources including banks, credit unions, and lender specifically dedicated to real-estate.
  
• Compare costs and rates
  Make sure to look at closing fees, interest rates, and PMI (Private Mortgage Insurance) as a whole when shopping for a loan.  Just because a lender has great rates, doesn't necessarily mean they have the best loan!
  
• Negotiate to get the rate and price you deserve
  Like any salesperson, many lenders will try to get you into a more expensive loan if they can.  Don't be hesitant to negotiate closing fees and points to bring your total loan cost down.  There are plenty of lenders willing to do this to make a "sale", if you just ask.
  
• Select the best type of mortgage for you
  There are lots of different types of mortgages out there to choose from.  And all come with different features that may be bad or good depending on your specific needs.  Know the clear difference between fixed, variable, balloon, etc. by talking with your lender or a certified housing counselor before you sign any papers.

TIP 3: Don't Forget Your Checklist

When shopping for a home, it is always best to know just what you are looking for.  A great way to stay organized is to create a buyer's checklist for each property you visit in person or find online. Some things to jot down might include:

• Square footage
• Number of Bedrooms
• Number of Bathrooms
• Storage Space
• Fireplace(s)
• Roofing and Siding
• Basement (dampness, cracks, etc.)
• Yard Space and Landscaping
• Fence, Deck, and Patio
• Neighborhood (other homes, children, etc.)
• School District
• Proximity to stores and services
• Recreation and Parks