Whether you’re looking for your first home or you just want another home, you’ve likely already wondered how the economy and COVID are affecting the decisions that homebuyers make. To be sure, the economy isn’t at its best right now, but the upside to this is that interest rates are lower than they’ve been in a very long time. If you intend to buy a house in 2021, it’s good to be prepared for some of the things that you might run into, and below are five things to keep in mind before you decide which house you want to buy.
- Have a Good Idea of How Much You Can Afford
Getting prequalified is always a good idea because the last thing you want is to waste your time looking at houses that are too high or even too low in price. A mortgage company can quickly prequalify you so that you get an estimate of the home price to look for, and you can even get a rough estimate through some of the online calculators found on various realty and financial institution sites. - Always Get a Home Inspection
Many homebuyers make the buyers’ contract contingent upon a home inspection, and this is a good idea even for newer homes. Home inspections will let you know the age of the appliances, any problems that may be there regarding the structure of the home, and anything else that you need to be aware of before you go any further. Home inspections save you a lot of time and money and are a smart move on your part. - Compare Interest Rates and Terms
Although most financial institutions offer competitive interest rates on their home loans, it’s still a good idea to shop around and compare different companies. Rates and loan terms can vary from one company to the next, and it’s easier than ever to find out what each institution is charging, thanks to the Internet. Most real estate and banking companies list this information right on their websites. - Determine What Your Debt-to-Income (DTI) Ratio Is
In order to determine if you can afford the monthly note on a particular home, you need to know your debt-to-income ratio. Most banks recommend not paying more than 30% of your monthly income, including debts, for the monthly note on your new home. Some banks recommend a slightly different number, but knowing your DTI ratio is necessary to make sure that you can afford that note. - Be Flexible with Your Plans
Home buying is part art and part science. That is, you can picture how your dream home should look, but you have to realize that it may not look exactly like that when you find it. Sit down and make a list of what’s most important to you, but be realistic because you may not get everything that you want in your new home. Take notes on each home while you’re out looking at houses, and realize that in the end, you may have to compromise instead of getting everything you want in a home.