If you’re in the market for a house, you’ve likely already done quite a bit of research into what you want, where you want it and how to buy it.
However, as you move forward, you may run into a few surprises. To help you make the best decision about your future house, here are four surprising things about buying a new home.
You can bid anything you want
No matter what a seller is asking for a house, you can bid what you like. If you’re working with a real estate agent, you’ll likely be advised not to lowball, but that doesn’t mean you have to offer an amount that makes you uncomfortable.
While it’s best to look at houses in your price range, there is more to how much you pay than the list price.
“Drafting a solid offer, or purchase contract, is like successfully cooking a new recipe,” according to Home Finder. “As a buyer, you want to pay the lowest possible amount for your new home, and have flexible terms for items such as earnest money deposits, mortgage commitments and closing dates.”
Work with your agent to discover what similar properties are selling for, the value of other homes in the neighborhood, how long the house has been on the market and any other information that can help you craft a solid offer.
You don’t need a large down payment
Perhaps you’ve heard you need a 20 percent down payment to buy a house. With the median home price in Michigan at $135,000, that’s $27,000 cash. Don’t fear, though, as there are plenty of options for people who don’t have that much saved.
For example, banks such as Eaton Federal Savings Bank, offer no down payment loans to certain groups, such as military veterans or people buying a home in a rural area. Additionally, there are loans available through the Federal Housing Administration that let first-time homebuyers front a lower down payment.
Your new home may need work
You might find a fixer-upper in a neighborhood you like or a home in good condition that needs just a little work. Whatever it is, you don’t want to worry about coming up with money for repairs immediately after signing a contract.
Bundling the cost of home improvement with your loan will help you make the fixes you need right away. You’ll avoid biting off more than you can chew by raising your monthly payment just a bit, instead of having to pay a lump sum.
You could even get a loan to build your house from scratch, whether you’re hiring a contractor or doing the work yourself.
It matters where you get your loan
You’re probably familiar with basic mortgage choices, including the standard 30-year loan, along with 10- and 15-year options. Additionally, you’ll choose an adjustable rate or a fixed rate mortgage, depending on how much you can afford for payments now.
Although many financial institutions will offer these, they won’t all stick with you for the life of your loan. In fact, many banks immediately turn around and sell your loan. Suddenly, you have to deal with a far-off corporation to make payments and try to contact customer service with questions or concerns.
Ask your bank its policy, and shop around if you prefer the comfort of keeping your loan local. Consider Eaton Federal Savings Bank, which keeps its loans in-house, so it can serve you for the life of your mortgage.
