Buying a house in Boston? Whether you’re a first time buyer or a veteran property investor, there are a few tips that realtors have gathered that can help you save money and ensure a stress-free transaction:
- Make sure you get the best mortgage deal possible
Home buyers are usually so concerned with getting approved for the loan that they don’t take the time to really research the smaller details of the mortgage contract that they sign. One or two points difference in the rate or the loan fees might not seem like a major difference, but over a 30-year period the cost implications can be massive, so it is worth your while to get multiple proposals and negotiate your fees with the bank or broker.
No closing costs mortgages are a good idea, but speak to an accountant or use an online calculator to make sure that the no closing costs mortgage won’t cost you more than you save in the long run. Another good tip is to cut out PMI (private mortgage insurance), which requires that you have at least 20% equity in your home. If you are able to put away extra money then you can get rid of PMI as soon as you have paid down the mortgage balance to 80% of the original purchase price. If at all possible, save until you have 20% of the down payment so that you can eliminate PMI from the very beginning.
2. Don’t overextend yourself
Most people start looking at properties in a certain price bracket and while you should never be rigid, looking at houses at the top or above our range may lead to overextending. As soon as you start looking at more expensive houses, then you can easily start to convince yourself that you can afford more than you originally intended to spend. Also many houses sell above their asking price, another factor that will push you out of your comfort zone. Stick to your original budget and buy a smaller house instead of overextending yourself. There’s nothing worse than feeling pressured to make mortgage payments and meet all of your other financial responsibilities each month.
3. Calculate the fixer-upper jobs
A good idea is to settle for a home that is move-in ready. A house that requires extensive repairs such as painting, waterproofing or retiling can quickly add up. Before you know it, you’re stressed to find cash to fix the property that you bought and you are struggling to make mortgage payments.
4. Invest in a proper inspection
Some property issues, such as plumbing or electrical faults or mildew problems, won’t be obvious to the naked eye. Get a good inspection done so that you are aware of any potential problems and issues before you buy a house. Use a reputable full service home inspector that can check everything and often can do tests like Radon and Lead Paint as part of the service.
5. Hire a good lawyer
Property lawyers know the ins and outs involved in buying a property. Realtors will be able to give you standard purchase agreements and while a lot of the information is available online, a good lawyer will be able to negotiate the best terms for you. They will also be able to draft a watertight contract to make sure there aren’t any loopholes that can catch you off guard at a later stage.
At the end of the day, the more time you take researching your options and the better professionals you hire throughout the process, the more you will thank yourself later. It’s of little value to save a bit of money in the short term but end up paying much more in the long run.
Some people believe that cutting out a realtor from the equation will save them money, but this isn’t the case because you simply pay the same amount and the seller’s realtor is the one who gets a bigger kickback. Besides filtering more money into the other realtor’s pockets, you could also be opening yourself up for potential problems that you aren’t aware of because you don’t have an experienced professional on your side.
If you are relocating to Boston or a buying a home in the area, then partner with Osnat Levy. Osnat is a high energy real estate broker working in the suburbs of Boston. Contact us for more information today.