Looking for your first home is an exciting and confusing time. You will undoubtedly run into hurdles and surprises. There is a wealth of information available on the internet that can help with navigating through this journey. However, there are a few things that are commonly forgotten.
1. Check For Property Restrictions
Understanding what you can and cannot do with your house and property is very important. Whether or not a home is part of an HOA is just one common example of the types of restrictions that may be placed on a property.
Other restrictions may include the inability to subdivide land or a ban on business activities. Although these examples would only apply to purchasers of larger parcels, there may even be restrictions on businesses run from a home office.
Of more concern should be the ability to modify or expand your home, even adding a shed. Checking for limitations and restrictions on the property before you purchase can help prevent disappointment later on.
2. Understand Property Taxes and Insurance
Your lender may have already discussed taxes and insurance, but you want to ensure that you are fully aware of any requirements and how each will get paid. Most of the time, property taxes and insurance are included in your mortgage payment.
Even if your lender calculated and bundled all of your costs into the loan, you should still find out how much those costs are because you will still need to pay them after the loan is paid. Understanding insurance is particularly important because you can get different types of coverage, and simply choosing the cheapest policy may not be the best option.
3. Research Potential Hazards with the Property and Area
Learning about an area is crucial before you purchase a house. If you previously lived in the city or neighborhood, this will not be a big deal. But if you are new to the area, you will want to learn about things such as street flooding, natural disasters, and crime.
One example of a hazard you should look for is the potential for flooding. FEMA flood maps are a great resource as they provide levels of risk for flooding, which dictates whether or not you need to carry flood insurance.
4. How Do Problems Affect Home’s Value
In today’s housing market, it has become increasingly common for buyers to forego an inspection to speed up the process. That is a terrible decision that can come back to haunt you later. While most problems an inspector detects are relatively minor, others may involve structural concerns that could be very costly to repair.
In addition, the repair costs have the potential to permanently impact a home’s value. Even if repaired properly, a house with previous structural damage will not be worth what one with no damage history is. Therefore, it is critical that any problems are found before purchasing a house.
You should know a little more about what to look for and be ready to continue searching for a home.
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