Buying a Logan Utah home is a huge step no matter what period of your life you’re in. Being smart about your purchase is essential to protecting the financial future of you and your family. Take these steps to ensure your investment goes as planned.
Save A Large Down Payment
Gone are the days of buying a home with 100% financing, no job history, and low credit. Some loans, such as Utah housing and rural housing (USDA), will still allow you to buy without a down payment, but they are more difficult to qualify for, have higher interest rates, and are only for low income families.
Other than those loans, you will have to put some money down on your purchase. A larger down payment (10-20%) will allow you to qualify for more options when loan shopping, and will allow you to get a lower interest rate.
Even half a percentage point lower on your interest rate can save you thousands of dollars over the life of your mortgage. Besides, the payments will be lower, and you will have a little equity stored up in-case you need to sell your home sooner than you’d like.
One of the reasons so many home owners are currently underwater on their homes right now is because they put no money down. Their homes lost value causing them to owe more than the homes worth.
Also, many people bought homes using adjustable rate mortgages, and as the rates adjusted, their payments went up more than they could afford. Your money down will allow you to stay away from those types of loans.
Don’t Buy A Home You Can’t Afford
As a general rule of thumb, your house payment shouldn’t be more than 33% of your monthly income. I usually tell my buyers payments under 33% of their incomes allows them to save the money they need to keep their homes full of the things they need to live. It’s no fun to be house broke.
Besides, if you buy the cheaper home and pay a little extra on every payment, you can pay it off much sooner. After which, you can sell it and buy that bigger home when your family grows, and use the equity you built up for a larger down payment, allowing you to get a better monthly payment.
One thing many home buyers don’t think about when purchasing a Logan UT home is the cost of maintenance. If you’re home payment is so large that you can’t afford to take care of a bad furnace a couple years down the road, you shouldn’t buy that home.
As a homeowner, if you don’t maintain your home, you will lose value, and reselling it will be a much more difficult process. Can you imagine what a poorly maintained home would look like after 10 years?
To see, go over to my Logan UT homes for sale website and search homes priced under $130,000. You’ll notice the vast difference of price to square footage between the homes that have been well maintained vs. homes that need a lot of work. Repairing a home is a lot of money, and keeping it maintained will keep your costs down.
Get Pre-Qualified Before You Go Home Searching
Knowing exactly how much you can afford and knowing how much you qualify for are two different things. First, talk to a Logan UT mortgage professional to find out what you qualify for. Many times, my buyers are surprised by what they can or can’t qualify for, especially today, as lenders and loan programs are changing the qualification specifications on a daily basis.
Once you know amount you can qualify for, figure out how much you actually want to borrow. You may qualify for a $200,000 home, but the payment might make you uncomfortable. You don’t have to buy a $200,000 home just because you qualify for it.
Tell your Realtor what you feel comfortable paying and they should show you homes in that price range. The last thing you want to do is go house shopping, fall in love with a home, and later on figure out you can’t afford it.
After seeing a home you love but can’t afford, every other house you see won’t stack up, which will leave you frustrated. Getting your financing in order before you even look at a home will save you, and your Realtor, time and money.
Being A Smart Home Buyer
Being a smart home buyer will make your home search a whole lot more fun, and when the time comes, you will have the confidence and ability to put an offer on the Logan Utah home you always wanted.
We all know a home’s value may not always go up. So by taking these steps to secure a great home, with a nice down payment, and great financing. You can be one of the few who bought a home in a great buyer’s market on your own terms. It’s a great feeling to know you bought smart and can sell smart when you need to. Happy home buying!
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