4 Safe Steps for Buying a Home in Today's Economy
Whether you’re a regular news junkie or you rely on your better half to keep you updated on the latest, you’ll get the same conflicting messages about the state of today’s economy. One day you’ll hear about rising wages, and the next day you’ll read about the lagging growth in the GDP, or Gross Domestic Product.
The only thing certain about today’s economy is that it is uncertain. But that doesn't mean you have to abandon your dreams of becoming a homeowner. Hughes has four steps you can take to make sure your money – and your house – are safe regardless of the state of the economy.
1. Increase your down payment
The magic number for down payments has been established at 20% of the home’s value. Often, though, new homeowners will put down a much smaller amount. If you can’t afford a down payment of at least 5% of the home’s value, you may not be ready to buy a house. Having little or no equity in a home could mean taking a loss should you need to sell it.
2. Opt for less than you qualify
It’s best to buy a house that comes in well under your approved mortgage limit. This will keep your mortgage payments from dwarfing your monthly budget. Also, if the economy worsens, you’ll have a smaller mortgage payment to scrape together each month.
3. Find a good Realtor
Here’s how to find the Realtor that’s best for you:
- Speak to recent clients about their experience with this agent.
- Look up the licensing of your prospective agent. You can find this information online.
- Choose a winner. A Realtor who has been recognized for their excellent work is one you want working for you.
- Research how long the agent has been in the industry.
- Check the current listings under the Realtor’s name. Are they in the same price range as the house you’re hoping to buy?
4. Look for red flags
Aside from having a professional inspection done, check for the following yourself:
- A sturdy roof. A flimsy roof can bring expensive repairs. If you don’t mind replacing the roof, use it as a negotiating point for a lower price.
- Efficient heating and cooling systems. These can be costly to fix and replace. Plus, inefficient systems can hike up your utility bills.
- Strong structural components. Don’t be fooled by a fresh coat of paint. Check beneath the surface for strong pipes, wiring and insulation.
- Overall functioning of the home. Try out everything! Open doors, turn on faucets, flick light switches, and flush toilets. If you find any major problems, rethink your decision to buy this home. Don’t mind a handful of minor repairs? Use these as a negotiating point.
Don’t forget to call, click or stop by and talk to the mortgage professionals at Hughes Federal Credit Union! Learn about our fantastic programs on home loans and mortgages before you start your search. We’ll help you with the finances as you find the home of your dreams!