5 Actions to Take Before You Buy a House

I have worked with many of my clients as they navigate the home-buying process, and one of the biggest mistakes I see people make is not talking to a mortgage advisor sooner. Heeding the advice I’ve given clients many times, I consulted with Pinnacle mortgage advisor Jamie Lacy before developing this list.  Here are five actions that we recommend people take before they even start looking at listings.

• Make a realistic decision on your budget. Don’t be tempted to check out houses that are over your price range. Take a look at how much you’re paying now for rent and utilities or, if you own, the monthly mortgage payment, taxes, insurance, utilities and other costs. Then determine how much more you can spend. This mortgage payment calculator can help you determine how much you can afford.
• Choose your real estate agent carefully. Buying a house is not a DIY project. A real estate agent will represent you and assure all contracts are accurate. She will save you money in the long run. Ask friends for referrals, and when you find an agent, ask for references. Be sure the agent has good experience selling houses in your price range and in the neighborhoods you want to consider. 
• Get pre-approved for a mortgage amount before you start looking. A mortgage advisor will review financial documents, including your past two tax returns, and your credit score to determine what you qualify for. You can certainly purchase a home that is less than the preapproved amount, but this way you’ll have a good idea of your price range before you start hunting.
• Hire a professional inspector to inspect the prospective house. When you find the perfect house you should thoroughly inspect it yourself, but you also need to hire a professional inspector to look at the entire property and explore any questions or concerns you have. The buyer typically pays this cost, which runs between $300 to $500.
• Negotiate the rate and terms of your mortgage and shop your homeowners insurance.  Unless you plan to live in the house just a short time, I recommend a fixed-rate mortgage for 15, 20 or 30 years. Don’t be tempted by today’s adjustable rates that may be lower than fixed rates—they’re both very low right now. To save money on your homeowners insurance, check out a number of insurers. Narrow your choices and get quotes from there. But don’t make your decision solely on price—you should consider products and service too.

For more information about each of these points, including tips on buying a home in foreclosure, listen to the full podcast below.

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Nancy Zoretic can be reached at 615-744-3720 or nancy.zoretic@pnfp.com.