How To Choose The Right Location To Buy A Home

When it’s time to buy a new home, you’ll hear a lot about the importance of location. How can you choose a place? Whether you’re moving around the corner or across the country, there are a few essential things that you should know in order to select the best place for you to live. Read on for some questions that you should ask yourself when trying to find a good fit for a  location to live. 

What Should Be Close?

There’s more to a home than what schools are nearby or how close you are to work. While these things are essential, you’ll need to understand more about our lifestyle to find an excellent location. You’ll have to look at your life and your family’s life on a day-to-day and weekly basis. What types of activities do you enjoy? How close do you want to be to a grocery store, a gym, or a shopping center? How close do you want to live to the city? The mountains? The beach? Does your family enjoy outdoor recreation like hiking or walking through the park? Making sure that the things that are important to you and your family are accessible will be a big part of choosing a location to move.

How Walkable Is The Neighborhood?

If your kids will be walking t school, or you enjoy daily strolls with the family dog, the walkability of a neighborhood is important. Many places allow you to walk everywhere right out your front door to the grocery store or the hair salon without ever setting foot in a car. You may even want to be able to walk to a bus or subway in order to get to work each day. Walkability is an important aspect to consider when looking at home locations. 

Who Lives Nearby?

You may want to consider who lives nearby when looking at different neighborhoods to move. If you wish to live near family or know some good friends who live close, this could be a good starting point for finding the right location to live. It’s always easier to make the transition to a new area when you know a few people.

How Quiet Is Too Quiet?

Some people love peace and quiet. Other people need a lively environment that allows them to access the hustle and bustle any time they choose. Knowing your want for peace is a big lifestyle choice and a large part of selecting a location to live in. The closer you move to a big city, the easier your access to the more exciting side of life will be. The further away you live from the city, the more likely you are to have more quiet.      

Buying a Home and Managing Money in Your 20s

Personal financial in your twenties comes with a steep learning curve. One minute you’re studying for your finals and the next you’re expected to suddenly know about APR financing, 401(K)s, and fixed-rate mortgages.

If you’re in your twenties and are facing these new challenges, you’re probably equal parts terrified and excited for the future. And, although it can be anxiety-inducing to step into the world of personal finance, you have one tool to your advantage that your parents and grandparents didn’t have: the internet.

So, in this article, we’re going to give you some tips about buying a home and managing your finances in your twenties.

Have an emergency fund

You probably have a lot of things you want to save for. Down payments on mortgages and auto loans, saving money for traveling, beginning your retirement funds, and maybe even starting a family; they’re all important investments that will take time and financial planning to achieve.

However, one thing that many young people neglect when they first start saving is an emergency fund. There are any number of things that can throw a wrench in your plans in your twenties. You might lose a job and have to live off of savings while hunting for a new one. Maybe something goes wrong with your car and it costs hundreds to repair. Or, you could have unforeseen medical expenses that aren’t covered by your insurance. Regardless of the reason, having an emergency fund will help you stay out of unnecessary debt.

It’s recommended to have at least 6 months of living expenses saved in your emergency fund. Once you have this amount saved, it’s a good idea to keep it in a separate account to avoid spending it on things that aren’t exactly an emergency.

Don’t live above your means

We all know that buying a house, going to college, and even buying groceries are all exponentially more expensive than they used to be. However, it’s still important to try to adjust your lifestyle to the things you can afford.

This includes the vehicle you drive, the first home you buy, and even smaller purchases you make.

Avoiding lifestyle creep

Related to our last point about living above your means, lifestyle creep is the phenomenon that occurs when you get a raise or a higher paying job: the more we make, the more we spend. However, it’s possible to avoid this trend by keeping your finances in check.

The next time you get a raise, make sure that money is put to use in either your retirement fund or savings account. This method is based on the goal of “giving every dollar a job.” When every dollar you earn has a purpose, you’re less likely to spend it on new video game consoles every six months.

Who Pays Closing Costs When Buying or Selling a Home?

The process of closing on a home can seem lengthy and complex if it’s your first time buying or selling a house. There are several costs and fees required to close on a home, and while it’s up to the individuals to decide who covers what costs, there are some conventions to follow.

In this article, we’re going to talk about closing costs for selling a house and signing on a mortgage. We’ll discuss who pays what, and whether there is room for negotiation within the various fees and expenses.

But first, let’s talk a little bit about what closing costs are and what to expect when you start the process of buying or selling a home.

Closing costs, simplified

If you’re just now entering the real estate market, the good news is you can often estimate your closing costs based on the value of the property in question. You can ask your real estate agent relatively early on in the process for a ballpark figure of your costs.

Closing costs will vary depending on the circumstances of your sale and the area you live in. In some cases, closing costs can be bundled into your mortgage, such as in “No Closing Cost Mortgages.” However, avoiding having to deal with closing costs often comes at the expense of a slightly higher interest rate.

If you are planning to buy a house and have recently applied for a mortgage, laws require that your lender sends you an estimate of your closing costs within a few days of your application.

Now that we know how closing costs work, let’s take a look at who plays what.

Buyer closing costs

In terms of the sheer number of closing costs, buyers tend to have the most to deal with. Fortunately, your real estate agent will help you navigate these costs and simplify the process.

They can range from two to five percent of the cost of the sale price of the home. However, be sure to check with your lender for the closest estimate of your closing costs. It’s a good idea to shop around for mortgage lenders based on interest rates as well as closing costs charged by the lender.

Here are some of the costs you might be asked to pay as a home buyer:

  • Appraisal fees

  • Attorney fees

  • Origination fees

  • Prepaid interest or discount points

  • Home inspection fee

  • Insurance and Escrow deposits

  • Recording fees

  • Underwriting fees

Seller Closing Costs

While the seller pays a larger amount of closing costs, sellers still have obligations at closing that can be just as expensive. The biggest expense for sellers is to pay the real estate commission. Commission usually falls in the vicinity of 6% of the sale price of the home. This covers the commission of both the seller’s and the buyer’s real estate agents. 

The main takeaway? Buyers and sellers both share the burden of closing costs. While the buyer has more expenses to take care of, the seller pays for the largest costs.

3 Questions to Consider About a Home Loan

Obtaining a home loan is a must for most homebuyers. However, there is a lot to think about to ensure a homebuyer can secure a loan that matches or exceeds his or her expectations.

Some of the key questions to consider about a home loan include:

1. What is a home loan’s interest rate?

It is paramount to understand a home loan’s interest rate, along with any associated loan fees. That way, a homebuyer will know exactly how much he or she will be paying over the life of a home loan.

If a homebuyer chooses a fixed-rate mortgage, he or she can lock in an interest rate for the duration of a home loan. This means a homebuyer will pay the same amount each month. And in many instances, a fixed-rate mortgage can be paid off early without penalty.

On the other hand, a homebuyer may prefer an adjustable-rate mortgage. With this type of mortgage, a homebuyer may receive a lower interest rate initially that rises after a set period of time.

Compare and contrast the different home loan options and their associated interest rates. By doing so, a homebuyer can make an informed home loan decision, one that serves him or her well both now and in the future.

2. Does a home loan require a minimum down payment?

Ask a lender about whether there is a minimum down payment required as part of a home loan agreement. Typically, a homebuyer will need to pay at least a small portion of a home’s price to secure a home loan, and it certainly helps to have this information available before you start evaluating available residences.

In addition, it may be worthwhile to save as much money as possible prior to starting a home search. With money at your disposal, you may be better equipped than ever before to make a large down payment, thereby reducing the amount that you’ll need for a home loan. Plus, you may even be able to boost your chances of getting a favorable home loan interest rate.

3. Will I need to provide legal documents to obtain a home loan?

Lenders will require you to provide proof of your income and assets, W-2 statements and other legal documents to finalize a home loan agreement. If you stay organized and have these documents readily available, you should have no trouble providing them to a lender as needed.

Overall, the home loan application process may vary from several weeks to many months. The time it takes to secure a home loan can be stressful, and if you need extra help along the way, it never hurts to reach out to a real estate agent.

With a real estate agent at your side, you can streamline the process of buying your dream home. This housing market professional can offer expert tips throughout the homebuying journey and ensure you can discover a great house at an affordable price.

Take the guesswork out of securing a home loan – consider the aforementioned questions, and you can move one step closer to getting the financing you need to obtain your ideal residence.