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Des Moines offers affordable homes, a great job market, and a bustling big city with a small town sense of community. If you’re thinking of moving to Des Moines, now is the time. Here are some tips to make your purchase a smooth and enjoyable process:
Know Your Credit Rating
If you’re planning to take out a mortgage to purchase your home, your credit score is a very important determining factor for potential lenders. Go through your credit reports and make sure everything with the credit reporting agencies is accurate and up-to-date. Lenders are looking for responsible individuals with a clean credit history.
Save Your Money
There are many loans available that only require small down payments, but they may not be the best decision. They will require mortgage insurance and typically have higher interest rates on top of that. In order to obtain a loan without having to pay any additional mortgage insurance, you’ll need to have a down payment of at least 20%. In addition to this, you’ll also have closing costs, a home inspection fee, and an appraisal fee that will need to be paid out of pocket. Make sure you pay attention to all of these extra fees, as they tend to sneak up on you.
What Can You Afford?
Before you start looking for your dream home, you’ll need to realistically determine what you can afford. Create a budget with a list of your current monthly expenses as well as your luxury items such as a night out with friends, clothes, morning coffees, etc. You want to cover all costs so that you don’t buy beyond your means. Take into account the other expenses that come with home ownership such as homeowners insurance, property taxes, or an HOA. Determining an affordable purchase price will ensure that you won’t be in over your head.
Research Your Mortgage Options
There are many mortgage options available, so make sure you choose the right one for you. You may qualify for a conventional FHA or VA loan, but if you plan to stay in the home for a lifetime, you may want a 30 year fixed loan. If you plan on a more short-term stay, you may want to investigate an adjustable rate loan. Ask your lender to explain the pros and cons of the loans available and then apply for the loan that fits your needs and lifestyle.
Find an Agent
We live in a world where you can search for houses with the click of a button and this is a good way to research neighborhoods and get an idea of what is available. However, finding a good buyer’s agent will open up many more opportunities to find a place that is right for you. Agents will be there to represent you and your best interest. Typically in any real estate transaction, the agent's commission is paid by the seller so it’s of no cost to you. Also, an agent is there to give advice, answer questions, and make the entire process less stressful. Hiring an agent will ensure that you get the help you need.
Buying your first home is a big decision, but if you’re prepared, it’s quite rewarding. What did you do to get ready for your big purchase? Share your experience with us.