07 Aug Buying a Home: What To Look For and Generating the Down Payment
Important Factors When Buying A Home
In the excitement of house hunting, especially buying a home for the first time, enthusiasm now may cause some regrets later. It’s easy to experience “paralysis by analysis”, forever failing to pull the trigger. But examine the following features of your prospective home through the eyes, and wallet, of the owner.
The HVAC system
Whether heating or cooling, our HVAC system is taken for granted, until it malfunctions. Inquire about the age of the system and if any paperwork is available that you, as the new/prospective homeowner, can utilize. Any obvious red flags about the HVAC should affect your purchase offer, if you make one at all.
The Property Itself
Buying a home means buying the property too. When fences, driveways, landscaping and other property features are “long in the tooth”, repairs and maintenance can take a surprising bite out of your bank account. If the current owner hasn’t paid for that upkeep, you’ll pay later. Factor in property costs when house hunting.
Think of the structure of the home as the skeleton. If the structure isn’t solid, the furnishings, chair rails, and paint will be little comfort when the “osteoporosis” of the house incurs costly necessary repairs. Don’t be shy about peeking behind the scenes of (possibly) your new home.
To a first time buyer, this list may seem daunting. But these factors of home ownership affect every day of our lives. Take the plumbing system of a home, for example. If you ever want to wash dishes, take a shower, water the lawn, etc., an efficient plumbing system is mandatory. So how do you inspect it?
Turning faucets on is a given. However, powers of observation work well too. Looking under pipes may reveal spots where drips occur, or are occurring. Mineral deposits and lime scale could also indicate older pipes and pre-existing conditions. And most obvious are unpleasant odors and visible mold in water-related areas like bathrooms and laundry rooms. Caution before buying a home prevents financial pain afterwards.
Besides noting any obvious roof damage, ask the current owner (or real estate agent) how old the roof is. If fairly new, ask if the receipts are available in case future issues arise. A newer roof is a great selling feature which a seller would gladly establish. Once again, deal with the subject of roofing now or later.
About the Down Payment
First, let’s mention the legendary 20% issue. While never foolhardy to provide such a down payment, it is no longer regarded as mandatory in the lending industry. No lender would refuse it, but as this article details, even a 20% down payment can be achieved creatively. Here’s a few options to acquire a down payment:
- FHA loans. Like any federal assistance, some restrictions apply. However, to see if you can take advantage of this, check out their website here.
- VA loans. Military service has many rewards, among them assistance when buying a home. The Department of Veterans Affairs offers help to active military, veterans, and surviving spouses. Maybe this article from the VA itself will help you.
- USDA loans. The good news is that no down payment is required. The other news is that qualifying is limited. These loans are intended for lower income people and for rural home ownership. If you’d like to know all the details, go to their website.
- HUD loans. Assistance from this government agency is tremendous, even providing state-by-state information for home buyers. Visit their website for information.
- The old standby: Saving some (or all) of it up yourself is totally under your control. The task of accumulating 20% for a down payment may seem insane, but any savings, combined with the options listed above, helps people become first time home buyers every day.
Since buying a home is usually the biggest purchase you’ll make, in the Iowa City area, real estate professionals should also be included in your journey to home ownership. Hopefully this information helps you find the home you love!