How to Get a Loan to Build a Home

If you have very specific requirements or wishes of your dream house, building your own home can sound like a dream come true. But are you prepared for how complicated it can be? Unless you’re paying cash in advance, you’re going to have to take out a home construction loan.

Like a mortgage loan but not quite, a home construction loan is a short-term, high-interest loan that provides funding to build a residential building. This type of loan is typically around a year in term during which time the home must be completely constructed and the family to reside in it must be issued a certificate of occupancy. Unlike a personal loan or a mortgage loan that pays out the total of the borrowed money in a lump sum, when a person takes out a home construction loan, the lender pays out the money in stages as construction on the home progresses. Borrowers are usually only obligated to repay interest on funds drawn to date until the construction is completed.

Sounds simple, right? Well, this type of loan is harder to get than a regular mortgage loan. The rates are higher, too. Why is this the case? Why are home construction loans considered higher risk than regular mortgage loans? The fact is, with a traditional mortgage loan, your home acts as collateral. When you stop making payments, the bank takes your house to settle up on what you owe them. When you take out a home construction loan, well, there isn’t anything for the bank to use as collateral. The house isn’t built yet!

So how can you convince your lender that they can trust you? Typically, they will want to see a construction time table (estimated), detailed plans such as blueprints, and a realistic budget or estimate of cost. The borrower will be required to have a builder’s contract including the draw schedule of how the builder expects money from your loan to be released to them, a comprehensive budget outlining the cost or allocation of those funds for each construction item, and the timeframe in which the house is expected to be built. The more information you can give the potential lender, the better.

Once you’ve gotten approved for your home construction loan, you will be put on a draw schedule that follows the terms outlined in the builder’s contract. As the builder requests funds or they are sent out to him, the lender will send an agent on their behalf to inspect the job’s progress. This is another way the lender protects themselves – for example, if your builders state they need money to put in window treatments, but the walls aren’t even up yet… Well, something fishy is going on!

You, the borrower, will only typically be expected to make interest only payments during the time that your home is being constructed. You usually will not be asked to begin paying on the principal cost of your loan until your home construction is complete. This ensures that you can afford your current living expenses while taking on the construction loan at the same time – so you are not paying the equivalent of two mortgage payments per month. That would be difficult for anybody to handle.

What types of home loans are there? Well, for starters, there is a construction-to-permanent loan. This type of loan provides the funds to build the home and your permanent mortgage. Basically, the loan covers the cost of building a house, and the day you and your family move into that house, the loan automatically converts into a permanent mortgage. This is the usual type of home-building loan, because it means that you’ll only have one set of closing costs to pay, which saves you a ton of money in the long run. You can choose a fixed rate (monthly payments are evenly divided throughout the term of the loan and never change) or an adjustable rate loan (monthly payments can change on a pre-determined schedule based on the market rate). Your loan term on a construction-to-permanent loan will be either 15 or 30 years.

You can also get a construction only loan. This type of loan only covers the building of the house – once that is done, the home owner will then have to pay the loan in full or take our a second loan to act as a mortgage to pay off the first loan. These types of loans can be more expensive – because you’ll be completing two separate transactions and therefore there will be two sets of fees. To make it as simple as possible – in this case, you will have two completely separate loans: a loan to build the house, and a loan to act as your mortgage that pays off the loan to build the house. You must be careful with this type of loan, however, because if during the home building process your credit is negatively altered, you may not be able to qualify for the second loan that allows you to move into the house!

You can also look into owner-builder construction loans. This type of loan is for those who want to build their new home themselves and plan to act as their own builder. Most lenders will typically not allow this of most people because the home building process is so complex, but if you are a licensed builder by trade, you can probably qualify for this type of loan.

Once you’ve chosen which type of loan you want to get for your home building project, you must make sure that you qualify for it. Qualifying for a home construction loan is not too different from qualifying for a regular mortgage. The only difference may be that you need to have some additional cash reserves on hand as it can be typical that home construction projects tend to go a little over budget.

To make sure you qualify, you should…

Have Good Credit

There are strong credit requirements when it comes to building a home. Construction loans are simply considered higher risk. You will need a down payment of 20-25% as well. The exact down payment amount is determined by the cost of the land and the planned construction. If you own the land already, you can use it as equity for your construction loan. Your lender can help you with this, and will check the credit and credentials of your builder as well.

Have Stable Income

If you are a tried and true “job hopper”, you may want to settle in your current position for a while before trying to qualify for a home construction loan. The lender wants to know that your employment is all but guaranteed – so that they are comfortable that you’re likely to be able to pay your loan back because you have a job. If you have a new job every six months, who knows whether or not you’ll be making enough to pay your mortgage at this time next year?

Have a Low Debt-to-Income Ratio

Yes, everyone has bills to pay – but if you’re racking up thousands in debt on your credit cards and then not paying it off properly, well, you’re going to have a hard time qualifying for a home construction loan. Make sure that around the time you start this process, your debts are in order and at least somewhat close to being paid off.

Have a Down Payment of 20 Percent

There are a lot of down payment forgiveness programs for a person that is taking out a regular mortgage – less so the case for someone who is looking to take out a home construction loan. You must have at least 20% of the total cost of building your house on hand when you take out your loan. It shows the lender that you are serious about building a home and that you are responsible enough with money to save up so much for your home – and that likely you will be responsible when it comes to paying back your mortgage loan after the home is finished being built, too.

If you want to build a home from the ground up, know that you are looking at a more complex situation than if you were to go take out a mortgage loan for a previously existing home. You have to produce more documents (plans, blueprints, budgets, and builder’s information on top of the usual tax returns, bank statements, pay statements, etc), the loans are a little harder to qualify for, and more – but, on the up-side, you get to design the house of your dreams so that no detail is left behind. Whether this is right for your family depends entirely on your wants and needs as a family and your financial situation – your mortgage lender can assist you to prepare for any type of mortgage loan you choose to take out.

What to Expect When Building a House

So you want to build a house instead of buying one that’s already constructed. This can be a great idea for many reasons! By building a house, you guarantee that your spending is controlled one hundred percent by you, as well as ensure that the house has everything that your family requires to go about their daily lives – whether that applies to wants (such as extra rooms, specialty rooms, extra outside space, or certain fixtures), or needs (such as handicap equipment or a certain bedroom count for a larger family). It can be extremely difficult to find a pre-existing home that checks all of your boxes and is exactly how you want it.

You take out a loan to build a house just like you would take out a loan to get a mortgage. However, the money is spent a little differently. The average cost to build a house from the ground up is a little over $290,000 but that can vary greatly. The lowest you will be able to build for is around $147,000 and the highest you can likely get approved for is around $436,000. These numbers depend on a lot of things – the home’s location, it’s size, how many rooms it has, the quality and newness of it’s appliances, and more. Thankfully, when you build a house, you are completely in control of all of these factors. Theoretically, there should be no surprises!

Here are the general steps towards building a house from scratch.

Figure Out What You Want

Before you even talk with a lender, you need to know what you want in your house. After all, the lender has no idea how much they need to lend you if they don’t know whether you want a one bedroom house or a five bedroom house. Consider things like build type, location, and size of your home. These are the three general “building block” concepts that will help your lender form an idea of what you’ll want loaned to you.

Another thing to consider is whether or not you want to buy into a housing development or not. In this case, the builders of your future home will have you choose from a limited number of floor plans, typically with a list of add-ons or upgrades to choose from. Going this route is more like building a house from a catalog than starting from scratch. If you don’t want to make every single decision for every square inch of your house, this is the way you will want to go. It does limit your options, but it is also quite cheap compared to building from scratch. You can save up to 15% on home building costs by going through a housing development!

Even cheaper than building your house through a housing development is go build what is called a “pre-fab” house. These homes are manufactured off site and then the pieces are assembled on location, which means that it’s also much speedier than building from scratch. These homes can be just as roomy and beautiful as homes that are built on site, but make sure you are getting better than builder grade product. “Builder Grade” means that the product (flooring, walls, windows, doors, and more) are just good enough to pass inspection or rules. Think particle board furniture – it does the job, but won’t last as long. Do your research on pre-fab companies to make sure you won’t get stuck with builder grade products!

Once you know what kind, size, and type of house you want, where you want it, and how you want to go about building it, you should…

Create Your Budget

Once you’ve outlined your needs and wants and how you’re going to get them, you should compare the estimated costs with what you’re willing to spend and make changes as needed. You will definitely need to do a lot of research and get estimates from a lot of building professionals. You don’t want to start something you can’t afford to finish here, so make sure you go above and beyond doing your due diligence to make sure you truly can afford to pay back a loan for the amount that you need. Talk to your loan professional to see how much you can get pre-approved for – this will help you cement numbers in your mind. Make sure no stone goes unturned when it comes to creating your budget.

Next, you’ll…

Buy the Land

You’re building a house, so of course you need somewhere to PUT the house. It’s not uncommon for people to state that they were so focused on building the house that they didn’t think about the fact that they have to buy the land the house is going to sit on. When you’re scouting out the perfect location for your future home, make sure the location you choose makes sense for you and your family. Is it close enough to town? Are the neighbors far enough away for you to have as much privacy as you want? Do the other houses have good curb appeal? Is the lot big enough for your house with room left over for a yard? Are home values in the area similar to your projected home value? These are all extremely important questions to ask before you talk to your lender and get a loan to buy the land you’re going to build your house on. You want it to be perfect – no regrets!

Once you have bought the land your house will sit on, things have really started moving along. This is the point when you will…

Hire Professionals

If you chose to build a completely custom home where you make every structural and style decision from the ground up, you’re going to want to hire a general contractor to manage all of the subcontractors (the guys that do the foundation, the guys that do the frame of the house, the guys that lay the carpet, the painters, the door and window installation men, etc). The general contractor will also likely be willing to handle the legal aspects needed to complete the job properly. It’s likely that in this case you’ll also want to hire an architect, or at least have a consultation with one to look over your blueprints. Make sure that any professional you hire (down to the guy who installs your internet) is properly licensed and has great reviews or references. You don’t want to find out too late that the company who poured the foundation for your house did a horrible job, and now you have to backtrack to start completely over from day one.

At this point, you have your land, a group of hired professionals, and ideas. It’s time to really get started. Now, you can begin…

Developing Plans
Did you decide to go the way of a pre-fab home or a housing development home? If so, this will be a little easier. If you plan to build a custom home, however, you definitely need to hire an architect to ensure that your vision is structurally sound. Will the water pipes run in such a way that you can position your bathrooms and kitchens throughout the house like you want? Where are “support” walls needed and how will it affect your vision? Is your second story properly supported?

Once these questions are all answered and any issues are resolved, you can…

Get Your Paperwork Ready

Did you hire a general contractor? If so, you’ll be glad you did right around now. To get your house built, you’re going to need a ton of permits at your city, state, county, and federal level. There are a lot of rules when it comes to building a structure of any kind so this is normal. Your general contractor is trained to take care of all of this on your behalf, as well as any inspections that have to be performed so that the permits can be made out for you.

After this, you will want to…

Purchase Insurance

Your general contractor and your subcontractors (should) have insurance of their own, but you should purchase your own insurance to protect yourself financially, as well. You never know when something will go wrong. You can speak with your general contractor about this – they will be able to advise you where to look for good insurance.

And finally…  After so long:

Begin Construction!

Your vacant plot of land is ready to be turned into a home with a yard. This part of the process could take three months or longer than six months – it depends on the finer details of your house as well as the weather. When it’s done, an inspector will take one last look at the finished home to ensure that it was built according to the plan you made at the beginning of the process – and that the home is structurally suitable for someone to live in. Congratulations – you built a house!

How to Buy a Home With Down Payment Assistance

When an expected down payment amount is 20% of the total cost of your house, it can seem daunting and like you’ll never be able to save enough money up. Buying a $200,000 house at only 3% down would take you two years if you were only able to save around $200 per month, which is what most people say they are able to save. That’s a lot of years of saving up before you can even get close to 20%! But have no fear – most first time home buyers can apply for down payment assistance programs through their state and local municipalities. Grants and forgivable loans are typically available. You can receive help with getting your mortgage. It’s easier than you think.

How do these programs work? The help comes to you through state housing finance agencies as well as city and county government programs that are aimed at meeting affordable housing needs. The types of closing costs and down payment assistances can vary depending on which program you’re using. There are more than 2,000 down payment assistance programs in the United States alone that are nationwide – and that’s not even accounting for the thousands that work at local, city, or county levels. It has been calculated that those who use down payment assistance programs have saved, on average, $17,776 more over the lifetime of their mortgage than those who didn’t – and nine out of ten properties in the country qualify for assistance as long as the home buyer is eligible to receive it.

You’re more likely to qualify for down payment assistance (and then to get more money) if you buy in a so-called target area.  The legal word for this is a “qualified census tract”, or QCT. These tracts are designated by the US Department of Housing and Urban Development, based on household income data of the areas in question. Your state or local authority can also designate certain areas. The areas chosen are usually places that have experienced chronic and unusual economic issues, or need help financially regenerating themselves.

Typical types of assistance include:

Low Interest Loans: These loans must be repaid over a designated period of time, usually about ten years from the day the loan is paid out to you. The purpose of this type of loan is to spread the down payment and closing costs over multiple years instead of you having to pay it all at once up front.

Zero Interest / Deferred Payment Loans: Generally, no payments on the down payment or closing cost loans are due until  the home is sold, the mortgage term ends, or the mortgage is refinanced.

Zero Interest / Forgivable Loans: These loans are forgiven over an agreed upon period, such as five years. The money doesn’t have to be repaid under the condition that the borrower still owns and lives in the home after the period is over.

Grants: Grants are the outright gift of monetary assistance. They are not required to be repaid under any circumstance.

Who can get down payment assistance? Most down payment assistance programs are only for first time buyers, but don’t count yourself out just because you’ve owned a home before. The legal speak in the fine print of the program’s terms typically state that they consider a homebuyer to be a person who has not owned a home for the past three years. You also will likely qualify if you are a teacher, police officer, emergency responder, or government employee. Some programs, but far fewer, are open to qualified repeat buyers, too, so it’s worth asking about if you need the help.

Besides being a first time home buyer, a person can qualify for a down payment assistance program by taking a home buyer education course online, meeting income limits (most programs are geared towards low or moderate income folks, so a potential borrower’s income must be below a certain threshold), purchase in an approved location, stay below the maximum home purchase price (typically a percentage of an area’s median home purchase price), or contribute some of your own money towards the purchase.

How do you apply for mortgage down payment assistance? You can start by talking with your mortgage lender. They will be able to direct you to assistance programs offered by your area’s housing finance agencies. They will also be able to quickly run over each program with you, explain which you have the chance to apply for, and explain how they work. You can then check with your city and county to get the ball rolling on the programs you wish to apply for. Do this by visiting the website of the local government agency or organization administering the program to learn more about their requirements – for example, they may only work with certain mortgage lenders. Then, you’ll apply for the mortgage with a lender who is approved to work with the grant program. The local agencies can direct you to a mortgage lender that they work with, if you need them to.

Some common examples of homebuyer down payment assistance programs are…

HUD’s Good Neighbor Next Door: This program is run by the US Department of Housing and Urban Development, and it’s not strictly limited to those who are first time buyers. To be eligible, you must be purchasing a property that is in a designated area, and you must be of a certain profession – either a law enforcement officer, a firefighter, an emergency medical technician, or a teacher. If you commit to living at the home for at least 36 months, you can receive up to half off of the list price of the home, which sounds wonderful – but the designated areas can often be in places that others are reluctant to live in, so weigh your options before you go with this program.

National Home Buyer’s Fund: This one is pretty straight forward – after you find a participating lender, this program provides up to 5% of your loan amount. It’s a non-repayable grant, which means you don’t have to pay it back. Check with your mortgage lender to get more information on how you can qualify for this grant – it differs by state.

Veteran’s Administration Loans: If you are a United States veteran or active duty, you should qualify for a Veteran’s Administration loan. With this type of loan, you don’t have to make a down payment at all. You can typically get a competitive mortgage rate with this type of loan. They are backed by the government and offered through participating lenders, so as long as you meet the service requirements, you can qualify for one of these loans.

Veteran’s Administration Adapted Housing Grants: If you are a disabled United States veteran, you likely qualify for this. This type of grant helps you purchase a home that is adapted to your service-related disability. This type of grant applies if you need to make changes to a home in order to make it accessible for your disability.

USDA Loans: If you like the idea of living out in the country, look into a USDA Loan. You can get a home loan using the Department of Agriculture program, which is meant to help those with lower and moderate incomes buy homes in more rural areas. You don’t need a down payment, but you do need to meet certain income requirements. If you don’t like the idea of living in the country, this type of loan is not for you, as it requires you to live somewhere rural.

First Home Club from Quontic Bank: This club offers the chance for potential home buyers to receive matching funds towards a down payment in the state of New York. When you team up with the First Home Club, you make monthly deposits into a Quontic savings account. For each dollar you save, you get four dollars in matching funds up to $7,500 to go toward your new home. You must have your mortgage funded through Quontic if you want to take advantage of this program.

Local First-Time Homebuyer Grants: Most of these grants are extremely specific in what type of situation they will serve. These grants are income dependent and location specific. There are very few of these programs at a national level and they are typically distributed by state. Some of the programs require you to repay them if you only live in the house for a short period of time. They are, however, usually forgivable, typically forgiving 20% of the grant each year for five years. Some programs can also levy a tax recapture if you sell your home for a profit before a certain number of years have passed. This means that some gains you will get for your home’s increased value when you sell might get taxed in order to make up for the break you got earlier.

All The Forms You Need to Buy a House

In 2000, less forms were required to obtain a mortgage than now, in 2020 – by far. It seems that in the years before the great recession, it was pretty simple to get approved for a mortgage, which led to borrowers not being thoroughly vetted, which was a huge factor in the recession. Mortgage lenders certainly learned their lesson, and now, creditors will much more thoroughly assess a potential borrower’s ability to repay their loans. This means, to the stress and dismay of many wishful mortgagees, more paperwork to be done.

What forms you will be required to give are half standard, and half dependent on your situation. For example, every mortgage applicant will be required to offer proof of identity, but not everyone will be required to show proof of self employment (as not everyone is self employed). Your mortgage lender or mortgage broker will be able to give you a much better idea of what documents you’ll be asked to provide. Here are the documents you’ll certainly need, as well as some you may or may not need.

Tax Paperwork

To get all the details on your financial situation, your mortgage lender is going to want a copy of all of your tax paperwork. You’ll almost certainly be required to sign a form called “Form 4506-T”, which lets the IRS know that you have permitted your mortgage lender to request a copy of your tax returns. You’ll likely be asked to show at least two years of tax returns, or more if your financial history is considered a “special case”. Having your tax paperwork allows your mortgage lender to make sure your annual income is consistent with your pay stubs. In their mind, if you can’t pay your taxes, how do they know you’ll pay your mortgage loan back?

Pay Stubs (or Other Proof of Income)

If you are employed, you’ll be asked to provide your pay stubs from the last few months. Your pay stubs will be compared to your tax paperwork in order to make sure everything makes sense in that department. Then your pay stubs will be used to gauge your current earnings. Knowing what you make allows your mortgage lender to make an educated decision on how much money they’re going to lend to you. They don’t want to give you more than you can pay back within reason. Your pay stubs also act as proof of employment, and reassures the mortgage lender that you’ll be able to repay your mortgage.

Self Employment Proof of Income

If you don’t get pay stubs or you are self employed, you’ll have more documents to produce – and even more if you are “paid under the table”. Other sources of income such as child support will also be submitted here. You will need to offer your lender proof of these incomes with 1099 forms, direct deposits, bank statements, or other means. It’s the mortgage lender’s job to do their due diligence on you – and if your employment or income situation is unique, they will have a little more work on their hands in order to perform their job properly.

Credit History

They’ll ask for your permission first (as is law), but your credit report is going to be checked out by your mortgage lender, too. You’ll have to explain any blemishes, such as a foreclosure or a bill sent to collections. Typically this is done by way of you writing up a report with an explanation of why the ding on your credit is there. It can work in your favor, because lenders may be willing to look over a one-time screw up or unavoidable circumstance if you explain things to them. Otherwise, they are forced to assume that any ding on your credit is due to habitual delinquency.

Bank Statements

It’s almost certain that lenders will also want to check out your bank statements. They don’t care that you spent $50 at the grocery last Tuesday – what they’re looking for is whether or not you have enough cash stuffed away to cover a few months of the mortgage payment if you lose your job or get laid off. They also want to make sure that your down payment money didn’t just mysteriously show up in your bank account yesterday – they want to see the history of it’s buildup, and that it has been in your account for at least a few weeks, if not a few months. You will likely be asked to provide five to six months of bank statements, with nothing blacked out.

Assets (If Any)

Have a car? What about an insurance policy? Do you have a stash of cold hard cash under your mattress, or stocks, or gold in your safety deposit box? Your mortgage lender wants to know about that, and will ask you to write up a report naming all of your assets and what they’re worth in today’s terms (not when you bought or obtained them). This is because your mortgage lender wants to know you have other ways to pay for your mortgage if your source of income falls through. Could you sell off your stocks and support yourself for a few months while you got back on your feet? That’s an asset. Report it to your mortgage lender – it will benefit your mortgage application.

Bankruptcy and Foreclosure

Have you been an unfortunate victim of bankruptcy or foreclosure? If so, you should first ask your lender how long you should wait to re-enter the mortgage market. If you have had a bankruptcy, your lender will want proof that your debts have been discharged and are no longer outstanding. If you have had a foreclosure, you might have to wait seven years before you’re eligible for a new mortgage, and you will likely have to show proof that the property deed was transferred.

Gift Letters

Have your friends or family given you any monetary donations toward your new house? You’ll have to report that to your mortgage lender. All you need is a letter, preferably signed by both you and the gift giver(s), stating their relationship to you, that they gave you money for use on your home purchase, how much they gave you, and that it was, in fact, just a gift, and not payment of any kind for services or jobs you performed for them. Your mortgage lender wants to make sure you can focus entirely on repaying the loan you took out from them, and that you aren’t trying to balance your mortgage payment with paying back mom and dad in addition.

Photo Identification

This one is probably the most obvious, but you’ll be required to show a government issued photo ID when you apply to buy a house. You can use a passport, a driver’s license, an ID card, or more. This just proves that you are who you’re claiming to be, and gives your mortgage lender a little peace of mind. If you’re in the process of getting your identification, you can ask your mortgage lender what he or she thinks is the best way to go about things. You may be able to offer up the paper temporary copies of your ID, or you may be asked to wait until the official copies come in.

Rental History Documentation

If you don’t already own a home, your mortgage lender will want to see copies of your rental history. It shows them proof that you can pay a monthly housing cost on time. This will likely be asked for in the form of at least a year’s worth of rent check copies. Your mortgage lender may also just ask for contact information for your old landlords – then ask them directly to provide the documentation they need to show you paid your rent on time. If you don’t have an extensive credit history, it’s almost certain that your rental history will be looked into, as it’s then the only way your mortgage lender can prove you’ll pay them back for their loan.

Retirement and Investment Accounts

Do you have any retirement or investment accounts? You’ll have to supply two to three month’s worth of statements from any of these accounts that you listed on the loan application. That includes retirement accounts, 401(k)s, stock investments, and certificates of deposit. Even if the page is blank, submit it anyway!

Divorce

Divorce can be a big factor in huge financial life changes, so if you’ve been through one, you’ll need to provide paperwork on it. Obtain a copy of your divorce decree, which shows whether or not you have to make child support or alimony payments. If you do, you’ll have to provide paperwork on those things, as well, including how much per month you must pay and to whom.

It is the job of your lender to assess you as a borrower. Because of that, you’ll have to provide them with the necessary documents to paint the accurate picture of your creditworthiness.

Questions to Ask Yourself Before You Start the Home Buying Process

Buying a new house is a really big deal. You want to make sure you’re ready, and to do that, you have to ask yourself some hard hitting questions.

Why do I want to buy a house?

Ask yourself – why DO you want to buy a house? Is it because your high school rival just bought one, or your significant other is wanting one? Many first time buyers rush into buying impulsively or because friends, family, and/or spouses pressure them into doing it. Sure, if prices are low, it can be a good time to buy a house – if you can afford it. You should want to own a home so you can have a stable place to live, a set monthly house payment, a property to call your own, and something to invest in – not because you’re convinced you can “flip” it for triple the original selling price in six months.

Is my life stable enough for me to own a home?

Is your employment stable enough for you to commit to a 30 year mortgage? Do you have enough money in savings to cover the cost of your mortgage for a year (at least) if not? If the answer to both of those questions is no, you are not ready to buy a house. If you’re married, is your spouse going to be around for the long term? Divorce can really screw up homeownership, and have often lead to foreclosure. Your job and your relationship need to be rock solid before you commit to buying a home.

Can I really afford to own a home?

There are a ton of unexpected expenses that come with buying a home, and there is simply no way around them. At some point, your roof will need repairs. Your closing costs might end up amounting to more than you thought they would. Your homeowner’s association might as for way more in fees than you originally anticipated. You have to budget for those things – and for the down payment. Typically, you are required to put up at least 20% of the home’s value in cash if you want to qualify for a mortgage loan. Your monthly mortgage payment needs to sit in a range that is comfortable for you, and while your lender may approve a huge loan for you, that doesn’t mean you should take it. If taking a big loan means your monthly payments are going to be difficult to make, don’t sign your name on the dotted line – not even if you love the house that’s, sadly, out of your price range for now. Want to be sure you can afford the loan you intend to take out? Use a mortgage calculator to make sure you’re staying within your price range. Don’t forget to factor in upkeep, repairs, maintenance, taxes, insurance, escrow fees, and more.

Will I want to live here five years from now?

This is less of a “make it or break it” question, but you should decide what your intentions are before you move into your new house. Do you intend to stay in your house forever, or will you move again? What are the things that would cause you to move (the addition of children or elderly parents, etc). As you’re looking at homes and neighborhoods, imagine staying there for one, five, ten, twenty, and fifty years. Does the home have what you need to be happy in all of your future stages of life? Will it have room for all of your family members, and is the neighborhood safe for your loved ones? Are the neighbors good neighbors? Will you be living near a large factory or construction site that can plague your new home with loud noises and construction cones in the road for years? Is the home situated close enough to the nearest grocery store, doctor, vet, and dentist that you won’t need to spend 45 minutes in the car to go get milk?

Is the house I want appropriate for me?

Heart-eyes for a specific house is great – you’ve found your dream home, and now you want the keys. You’ve daydreamed about how you’d decorate it, too. But be realistic. Sure, one person could live in a three story mansion if they could afford it, but would you want to pay all that money for a house so big when you can only enjoy one room at a time? Don’t fall for a house that’s too much for you in some way or another (financially, size-wise, or otherwise) just because it’s easy on the eyes or spacious. A second story is not the mark of adulthood, and a bunch of rooms you don’t need become even more money wasted when you have to buy furniture to fill those empty rooms. Sure, it’s a good idea to have a few extra rooms on hand if you know you want to expand your family or that guests visit from out of town a lot, but you don’t need five extra bedrooms. Instead, focus more on layout, structure, “green” capabilities, foundation, craftsmanship, location, and neighbors. You can add onto a small house later – it’s much more expensive to go big and then have to figure out what you’re going to do with all the extra space!

Does it meet the 85% rule?

This sounds silly, but it’s a fantastic way to gauge whether or not a home is right for you. 85% of the home should be acceptable to you, if not something you love. 10% of the home can be slated for changes in the future, and only up to 5% can be filed under “I don’t like it, but I can’t do anything about it, so I’ll live with it”. If a prospective house fits this criteria, it’s probably a great house for you, as long as the financials line up. Unless you’re building your home to your exact specifications from the ground up, there’s probably going to be something about it that you aren’t going to be the biggest fan of – and that’s okay! You just don’t want the dislikes to outnumber the likes – then you’ll realize that you’ve just made the biggest purchase of your life on a house that… you’re not really a fan of. There are certain things with every house that you won’t like, but won’t be able to change – things relating to HOA rules, property lines, trash pickup day, etc, but a few things like that are okay too. Just make sure that at absolute minimum, you really love at least half of the house.

Does the area I want to live in and the home I want to buy translate to a high resale value?

Considering this is the biggest purchase of your life, you want to make sure of a few things relating to the long term, and this is one of them. Unless you know for a fact that you don’t intend to  move again (and we mean ever),  you need to consider resale value. Do factors like good school districts, easy access to the nearest town, and easy access to freeways  apply to your new house? They will be more important in the long term than just about anything else. Will you be able to sell the home at all? Avoid poor locations, road noise, airport noise, neighborhood nuisances, and other factors. They, obviously, also make a property incredibly hard to sell. While it may be tempting to buy a lower priced home that’s discounted because of bad location or other nuisances, most people will pass them up.

Do I trust my mortgage agents?

Your mortgage broker, your mortgage loan official, your real estate agent, and more… do you trust who you’re working with, or are they the first folks you could find to work with you? There are a ton of reasons why you should trust your agents, and if you can’t, you shouldn’t be working with them. The biggest expense of your entire lives is on their desk, and while it’s understandable that the mortgage loan officer is, honestly, mostly in this deal to make money, it’s the job description of your real estate agent to help you find your perfect home with very few to no hitches in the process  – so you should trust them the most. They’re supposed to be on your side. It’s within your rights to ask about their experience, their education, and to interview them before agreeing to anything or signing any paperwork that ties you to them.

Financial Tips After Buying a Home

So you’ve finally, finally got the keys. Congratulations! With this recent purchase out of the way, there’s no better time to take another look at your finances and see where you should aim for the future. Here are some financial tips for after you buy a new house.

Be Prepared for Emergencies

Are you prepared for an emergency? If a natural disaster happened right now, would you have supplies? If your sink flooded your house while you were gone for the weekend, would you have money to stay in a hotel for a few days? If your car broke down, could you afford to fix it? You have to ask these questions, even when your pockets are feeling a little empty after buying your new house. It’s not fun, but it pays to be prepared. Start an emergency savings fund right now, and track your progress towards whatever goal you want to set. You should aim for three to six months of living expenses at the very least.

Stop Spending Money

Yes, you read that right. Commit to a spending freeze. This is where you commit to a specific amount of time (typically a few months) where you and your family will not purchase anything beyond necessities. Snack foods? Nope. A new sweater? Sorry. A weekend trip to the Bahamas? Certainly not. The money that you would usually dedicate to “extras”? Save it. Put it in your emergency fund. Having a house is like having a child – at some point, something is going to go wrong, and it’s on you to fix it. Save yourself from being stranded up the river without a paddle by adding a little more than usual to your emergency fund for a few months. You may discover that you can live without your morning coffee after all.

Shop With Money, Not Emotion

Even if you’re on a spending freeze, you still have to eat and feed your kids. For most households, the grocery budget is a whopping 20-30% of the total family income. Keeping that in mind, you could probably afford to cut that down a little – and your new best money saving strategy is as easy as eating a sandwich. Yes, all you have to do is eat something before you go to the grocery store. This sounds bizarre to include in a series of financial tips, but in studies, it can make a HUGE difference in a family’s grocery spending. It has been proven that families who routinely make sure they’ve eaten before they visit the grocery store only spend between 10-15% of their total family income on groceries. That’s a lot less than those who go hungry! To stretch your grocery money even further, walk through the aisles with a shopping list – and do not deviate from that list! Take all the money you saved and put it in your emergency savings. (By now, you should have a pretty good amount of money in that thing!)

Keep it Simple

Okay, so you’ve successfully saved up $1,000 in your emergency fund and you want to go celebrate. So you take the family out for dinner and a movie – but wait, lets do a little math here. Say you have two kids. Dinner would likely total to around $70, and the movie (plus popcorn) for four will be another $50 or more. That’s at least $120 that could have gone in your emergency fund! Instead of going out on the town, see if you can recreate your celebratory night out at home. Simple pleasures are the best when you’ve just bought a house, and the best thing you can do during that new-homeowner period is to stay in your new home and enjoy it – not to run all over town spending all your hard earned money. Instead of ordering out, make pizza at home. Watch a movie on Netflix instead of going to the theater. Make coffee at home instead of going to the Starbucks. It can make a huge difference!

Say No to New Debt

We know that buying a new home can put folks on a financial high, thinking they’re so much better off than they originally thought – but don’t go crazy. You don’t need a new car to accompany your new house. No, you should not finance another loan, and you don’t need another credit card. If debt knocks on your door while you’re celebrating your new house, don’t answer! Only take on new debt when you’ve lived in your new house for at least a year, if not more. You need to know what to expect from your house in each season before you take on more debt. You don’t want to finance a new vehicle and then find out two weeks later that your garage floods every time it rains, or that your pipes freeze at the slightest hint of snow. Go through a full calendar year with your house, so you know all of it’s seasonal quirks, and you’ll be more financially comfortable if you decide you really do need another car.

You Don’t Need New Furniture

While we’re on the topic of new homeowner financial highs… Your home may be new and shiny, but your regular old comfortable furniture is just fine. You have years to live in your home – don’t spend $20,000 the week after you move in on new kitchen appliances, a new bedroom set, and an entirely new living room set. Buy new furniture over time, not right away. It’s understandable to want to create a space that’s truly yours, and to abide by the philosophy “out with the old, in with the new”, but it’s not a good idea as a new homeowner. If you really want to upgrade your furniture, consider reupholstering or repainting the furniture you already have. It will feel new and scratch that itch for new furniture without breaking the bank.

Repairs? Fork Out the Cash.

Now that we’ve told you everything you shouldn’t spend money on as a new homeowner, here’s something you absolutely should spend money on – needed home repairs. No, we don’t mean updating the lighting in the bathroom to something that matches better or putting in a new microwave that has more features . We mean true repairs, such as electrical wiring issues, water heater updates, replacing broken appliances, and replacing unsafe systems. These are the scenarios you’ve been hoarding all of your money for! If the roof is leaking, fix it. Don’t let your drive to avoid spending go too far. You’ve spent thousands, if not tens of thousands of dollars already to get into this house – don’t let that money go to waste by putting off needed repairs in your new home. Don’t know how much to save? Aim to put away about 1% of your home’s principal value in savings for repairs every year. That sounds like a lot, but with how much money you’ve saved so far, it should be no problem for you!

Revisit Your Budget

We assume that before you got the keys, you made a budget for your new mortgage payment. At least, we hope you did! Now that you have the keys and you’re in the home, revisit that plan. Some things may be different than you thought. You may have estimated too high on the monthly electric bill. It’s worth looking at one more time – you might be able to pocket a little bit more money into your savings account. It can be stressful to keep thinking about finances after you’ve finally closed up the process of making the biggest purchase of your life, but do it anyway. It’s essential and you can’t afford to skip it. Remember to leave room in your monthly budget for regular, scheduled additions to your emergency fund – that shouldn’t just be added to when you find some extra money here and there. The coins under your couch cushions won’t replace your roof!

Review Your Retirement Plan

If your budget changes at all from how it was before you bought the house, you need to review your retirement plan. 64% of Americans are on track to retire with no money. Don’t join their ranks. Compare your 401(K) to your new budget and make sure the amount is sustainable (or if you could increase it at all). If you don’t have a 401(K), look into getting a traditional IRA or a Roth IRA. If you don’t want to work for the rest of your life, now is the time to get on top of your retirement plan, and there’s no better time to do that than after you purchase your new home.

How to Sell Your Home During the Holidays

Merry Christmas! Joyous Kwanzaa! Happy Hanukkah! Yes – the holidays are here, and for most, it’s the most wonderful time of the year.

The holiday season is, on paper, from the end of November to the beginning of January, but some folks celebrate a lot earlier and later than that – and the department stores start preparing for the holidays much, much earlier! It can feel like the holidays begin before Thanksgiving and finally end at the end of January, which means there is a huge chunk of time that it can be very hard to sell your home. The “holiday season” is considered by most to be the worst time of the year to put your home on the market, in fact!

What happens, though, when you have to move before the New Year? When you’re on a time crunch and married to selling your home during the holidays, it can seem disheartening, but the season does have it’s advantages. Holiday buyers tend to be much more determined and serious about buying a home since the market is less competitive and there are less homes for them to choose from on the market. On top of that, everyone wants to be settled in their new homes before Christmas comes.

Read on to learn our best tips for successfully selling your home during the holiday season!

Deck the Halls! Well, Sort Of.

No, just because you are staging your home for tours by potential buyers, you don’t have to forego decorating for the holidays. Just make sure you don’t over do it. A Christmas tree or two in your home, with lovely twinkling lights and eye catching decorations? A wonderful idea! A giant, blow-up Santa Claus in your front yard that is motion activated to sing Jingle Bells? Perhaps not. Decorations that are too large or too many can make your staged home seem cluttered and overwhelming. Religion can also be a touchy subject – so definitely go for the holiday wreath, but perhaps stray away from holiday items with religious themes.

Hire a Reliable (and More Importantly, Available) Real Estate Agent

You don’t want to be out of contact with your real estate agent for two weeks because he is going on a long holiday vacation with his family. Of course, you should expect your real estate agent to be unavailable on Christmas Eve, Christmas Day, New Year’s Eve, and New Year’s day, but if you send your real estate agent an email on the 23rd of December, you shouldn’t have to wait until the 2nd of January to hear an answer. Referrals from friends and family can be a great way to find a reliable real estate agent, and you shouldn’t be afraid to ask them what their planned holiday hours are. A real estate agent that will go above and beyond to help you sell your home is invaluable if you’re trying to sell during the holiday season.

Seek Out Buyers That Are Motivated to Buy

If someone is seriously looking to buy during the holidays, you’ll know. They will push for quick responses and make it clear that they’re interested in moving things along as quickly as possible. If you come across a buyer that is interested but not motivated, you may end up still waiting for them to get things moving along when January comes along. Be proactive in working with your agent and your buyer’s agent to set deadlines and expectations for how you want things to be scheduled. You can also ask your real estate agent to put their focus on buyers who are almost certainly motivated to get things moving – college students, military personnel, or investors on tax deadlines.

Price it to Sell

You want your home to sell fast? Price it for a little less than what you normally would. No matter what time of year it is, if your home is priced low on the market, it will sell quickly, but this is especially true for those selling during the holiday season. It can draw in buyers who otherwise would have waited until after the new year to buy, too. A great price might just motivate them to start the buying process so they don’t miss out! While you might think it would be a better idea to gradually make small price adjustments and reductions, during the holiday season, it’s a better idea to lower your price before you put the house on the market.

Curb Appeal is Your New Best Friend

The winter can make your yard look dull. The grass browns or dies, the leaves fall from the trees, and the dirty snow from the road can push up next to your yard. It can also be hard for potential buyers to decide if they like the outside of your home if everything is covered in snow! If you can clear your driveway of snow, do it. Make sure your front steps are clear of ice. If you’re able, try to touch up outside painting and clear out the gutters. Make sure your house number is visible from the road and not concealed by snow. Also, pretty, simple Christmas lights can make a big difference as far as getting buyers in the holiday spirit goes – if you can make your home feel celebratory and bright before your potential buyer even walks in the front door, you’ve got a good chance of them liking the house!

Take Photos as Soon as Possible – and as Beautiful as Possible

If you can get great photos of your home before the first heavy snow falls, do it! You want your buyers to be able to see what their new home will look like in the warmer months in the year. In the more freezing months, buyers who are looking around for a new home are almost certainly most likely to start their home search from the comfort of their warm houses – on the internet or their mobiles. Make a great first impression with them by offering them clear and beautiful pictures! Some snow in the pictures isn’t bad if you aren’t able to capture spring or summer photos of your home, as long as the pictures are clear and easy to visualize what the actual home looks like under the snow.

Create an Awesome Video Tour

One of the reasons it’s harder to sell your home during the holidays is that people simply don’t want to venture out into the cold! When the temperatures are freezing and below, potential home buyers will thank you profusely for offering them a video tour of your home that saves them the trip out into the snow. This can be extremely helpful if you’re trying to sell in a place that gets extremely inclement weather, such as blizzards or polar vortexes. Make sure that your video tour showcases both the inside and the outside of your home, as well as all the rooms and closets inside the house. Want to make your video tour the best? Include a look into cabinetry, drawers, medicine cabinets, showers, and onto the back porch.

Got a Tour Coming? Make Your Home an Escape from the Cold

If a potential buyer does want to brave the cold to come and tour your home in person, make it worth their while. Make sure your home is cozy and inviting by turning up the heat a little, playing some holiday music, and offering some holiday treats on the kitchen counter – perhaps cookies. The longer the buyer stays in your home enjoying those cookies, the more time they have to admire how nice your home is! They will also most certainly appreciate your effort in making your home cozy and warm for them, and that will make you and your home a little more memorable to them when they start to think about which potential homes they want to seek out more information about.

If Your Home Doesn’t Sell by Christmas, Don’t Sweat It.

This would certainly be disheartening, but don’t worry – this could just be because everyone who is looking to buy a new home took a break to celebrate their family’s traditional holidays. The new year is just around the corner and everything will get back into the regular swing of things then. The holidays are stressful enough as it is – with gifts to buy, family dinners to plan, and dinners to prepare, and trying to sell your home at the same time can be a hardship. However, the new year is luckily only a few days away. Your house will soon be the talk of the town!

If you really need to sell your home during the holiday season, there are ways to do it that won’t take away from your regular holiday celebrations too much. Best wishes to you during the holidays and that you will be able to enjoy them in your new home!

Home Staging Rules to Appeal to Today’s Buyers

Are you selling your home? Congratulations! This is an exciting time for your family. If you want to sell your house a little faster, staging it can help. Surely you’ve heard some tips from your agents – make sure everything is clean, the home looks well kept and tidy, and that everything is generally picture-perfect… But what else can you do to properly stage your home?

It’s important to make sure your home is properly staged because it prompts potential buyers who are touring your available house to imagine themselves living there. Think about it – which house is easier to imagine yourself in: one that is white, clean, and minimalistic, or one that is colorful, crowded with another family’s furniture and décor, and perhaps a little messy? You must arrange your furnishings and décor to make your home look it’s best, as well as thoroughly clean (and probably repaint) your home, too. This may involve a few trips to Goodwill as you pare down your belongings, or even moving everything you own out of the home so the potential buyers can tour the home while it is empty.

Why else might you want to stage a house? Well, it’s simply strategic. In 2017, the National Association of Realtors (NAR) took a survey that showed almost half of all buyer’s agents believe that staging affects most potential buyer’s view of a home. Almost 80% of the buyer’s agents said it was easier for people to visualize a staged home as your own. It can also increase the sales price. The same survey by the National Association of Realtors proved that the sales price for staged homes was one to five percent higher than the sales price of unstaged homes. They sell faster, too – 39% of seller’s agents reported that staging a home reduces days on the market.

Understanding the benefits of home staging is one thing, but how can you pull it off properly and easily? You are already stressed enough while preparing to sell your home, buy a new one, and relocate your family – there is a way to do this that is stress free and enjoyable!  Here are our best tips for staging your home.

Get Rid of Clutter

It’s hard for a potential buyer to see themselves living in your home if they can’t see around YOU living in your home. This is possibly the most essential task when staging – purging. It is a simple fact that a clean, empty as possible house looks bigger and tidier. You can integrate this process into your packing system. Remove knick-knacks and personal items first when you begin packing, and get those boxes out of the house as soon as you can. Don’t put them in closets – the potential buyers will be looking in those too! If it’s not an essential, pack it up.

Clean, Clean, Clean!

Now that the clutter is gone (and some of your packing is done – hooray!), get to work cleaning. It may be in your seller’s agreement that you must have the home clean to some degree the day you surrender the keys. Now is the time to get on top of all of the “little” things, like the baseboards, the windows, a good carpet shampoo, and under the kitchen sink. Make your kitchens and bathrooms sparkle. Open the windows to air your family’s natural scent out of the home instead of using candles or air fresheners. You never know when a potential buyer may be sensitive to artificial smells and scents. If you have pets, scrub everything they regularly interact with. No one wants to buy a home that smells like a litter box or wet puppy. If it is within your means and you don’t have the time to do this yourself, consider hiring a professional cleaning service to get the worst of the scrubbing done for you.

Your Ultimate Goal? Light and Bright.

Buyers tend to respond most positively to bright rooms with lots of natural light. Don’t have enough windows around the house to give that great naturally lit look? That’s okay. What you can do is replace your lightbulbs to those with a bright output. The whiter the light, the more it looks like daylight. The yellower the light, the darker it will seem. If you do have a lot of windows, great! Open your blinds and pull back the curtains. Want to make things even brighter? Paint your walls white. Yep – white. Remove any funky wallpaper that potential buyers may disagree with, paint over your kid’s red and blue racecar themed walls, and cover up all of your dents and dings in the drywall with some good old white paint. Your buyers can add an accent wall if they wish to, once they’re moved in.

Stage Big Rooms First

What rooms do you look at first when you are intending to buy a house? Bedrooms, bathrooms, and the kitchen. The living room and extra rooms (dining room, family room, kids rooms) become less important compared to the rooms you and your loved ones will spend the most time in. That is exactly why you want to make sure you make those rooms the most beautiful, the quickest! You can also save money by doing this. Removing furniture and boxes from your home will likely require a storage unit, unless you already have the keys to your new home. This can be a big cost when you’re selling, so shorten the time you have to rent a unit by staging the best rooms in the house first – then the house will sell faster.

Rent Furniture If Needed

Don’t feel comfortable with your furniture being looked over by strangers? Is your old house empty because you’ve already moved to your new place? You can rent furniture for staging if you want to and can afford it. An option here is pop-up furniture, which is typically made from plastic or cardboard, but doesn’t look like it is. It looks nice but minimalist enough to give sellers the ability to visualize their family in the home. If you plan to leave your own furniture in the home for staging, the best rule of thumb is to leave about half of what you own in the home. This can be tricky if you are still living in the home while showings are being scheduled, but it will look bigger and tidier to potential buyers with less in it. If anything else, it might help you decide what you can live without and donate or sell.

Arrange Your Furniture – Owned or Rented

Whether you own or rented your furniture, it must be arranged in a certain way. Position couches and chairs a few feet away from the walls if you can. This is called furniture floating, and it makes the room look bigger. Set up the sitting area so that all those who were seated could easily see the tv and each other. Set the table so that your potential buyers could imagine their family having dinner in the dining room. Put away all of your gym equipment and children’s toys – this can seem like clutter if the potential buyer is not a gym-goer or a parent.

Don’t Forget Curb Appeal

You want to start your home off on the right foot with the people that are touring it. Make sure the outside is neat and tidy, too – it’s the first thing your potential buyers will see. Power wash your driveway and siding,  clean the windows, tidy the landscaping, mow the lawn, hide the dumpsters, and make sure your house number is easy to read from the street. Remove all personal belongings from the yard – garden statues, flags that are not of your country, bird feeders and fountains, or porch furniture. Most important, make sure that any damages to the outside of the home are remedied – you don’t want your potential buyers to see hanging shingles, broken siding slats, shattered windows, or creaky doors.

Don’t Forget the Extras…

Finishing touches can mean the world when you’re staging a house. Put some fresh flowers out on the kitchen counter, as well as a bowl of fresh fruit. Plant new flowers in the yard. If the holidays are near, keep your Christmas tree up and decorated. Run the vacuum right before every scheduled touring. Make sure the towels in the bathroom are folded and clean, and hide your dirty laundry hampers. Keep dishes out of the sink, and be sure to stay on top of picking up after your pets and kids. This can be stressful if you are still living in the home, but it will pay off tremendously.

When your home is properly staged, it will sell in no time. It can seem like another huge to-do on your list of selling and moving tasks, but it can be one of the most important. Homes that are properly staged sell faster and for more money than homes that are not staged properly, so make sure you stay on top of this if your house is on the market!

What to do After Closing on Your New House

Congratulations – you closed on your new home! Before you spend the first night there, there are some things you have to get out of the way. To make the transition into your new home safe and enjoyable, there is some preparing, updating, and other things that must be done.

Copy and Store Housing Documents

After closing is done, make three copies of your house closing documents. Store the originals in a safety deposit box at your financial institution. Store another set in your home (preferably in a fireproof safe). Keep another copy with your home owner’s insurance provider (they may require a copy any way as they set up your coverage). You may also digitally scan and keep an electronic copy if you would like, but it will hold less weight than a physical copy if it comes time to produce the documents to a government entity. Make sure that an electronic copy is not your only copy!

Change the Locks

Replace the manual lock sets on every single door in the house. Don’t forget about exterior doors to the garage, the pool, or the shed. Check detached garages or doors to detached mother-in-law houses, too. You never know who has a set of the old keys to your home (or who the last owners gave copies to), so you want to make sure that you are the only one with access to your new house. If you want to feel extra secure, call your preferred alarm company and set up a brand new alarm system or edit the existing one to have a new passcode.

Adjust the Hot Water Heater

If you have small children in your home, turn the water temperature down to at least 120 degrees Fahrenheit (or lower) to reduce the risk of unexpected bathwater burns. You never know if the people who lived in your house before you enjoyed blisteringly hot baths, so save yourself the (literal) burning surprise and make sure the hot water heater is set to a temperature that is acceptable for you and your family. This is also a great chance to inspect the hot water heater, but hopefully you already did this during your home tour.

Schedule a Deep Clean

You never know if the family that lived in your new home before you smoked (a problem if you have children), had pets (a problem if you have allergies), or was generally dirty. Schedule a professional deep clean so that your home is sanitized. This is especially important if you have carpet anywhere in the home, a swimming pool or a hot tub, a home gym area, or an HVAC unit. This is also a great time to have your central vacuum and HVAC units professionally inspected.

Update your Address

Go to the post office or the postal office website and update your address! You don’t want your mail to go to your old house after someone else moves in. Supply your employer, financial institutions, pharmacies, loan companies, insurance providers, utility providers, and any business or subscription service you frequently make payments to with your updated contact details. Thankfully, much of this work can be completed online.

Visit the Local Schools

Have kids? You should get them into their new school! Let the school districts know that your family will be moving to the area soon and that you have children who need to transfer to a new school. Your current school district will help you initiate the process by collecting pertinent paperwork from your current school as soon as you tell them that you’re relocating. Now is also a good time to prepare your kids for the big move and the school change. Soon you’ll be in your new home, so start getting them excited!

Measure Your Windows

When you have access to your new home, one of the first things you should do is measure your windows for treatments, decide what types of window treatments you want based on those measurements, and get everything ordered and professionally installed. If you don’t have time, you can hire an interior designer to conduct this work while you prepare the rest of the house. Once you move your family in, you will want privacy as you unpack, especially when night falls and anyone on the outside can see right into your new house.

Meet the Neighbors!

Go knock on the doors of your new neighbors, bring a hostess gift, and say hello! Exchange names and phone numbers, and ask about neighborhood social gatherings. If you have children, you might also ask about neighborhood play groups in the area. You never know if your new neighbors are your next new best friends unless you introduce yourself, and its always good to know that there is someone close who could watch over your kids in an emergency or your house while you’re on vacation.

Start a Home Maintenance List

Being a homeowner comes with maintaining your home. Regardless if you are planning on completing maintenance yourself or hiring a professional to do it for you, it’s important that after closing on your new home, you start a home maintenance list. You should schedule your home maintenance by season. For example, you don’t want to clean your gutters in the winter, when they could be frozen over! Do that in the summer or the fall. By keeping up on home maintenance, buyers can greatly reduce the number of huge repairs and expenses that come with deferred home maintenance.

Freshen Up the Walls and Ceilings

One of the first things most people want to do when they get a new home is repaint. Whether you choose all white walls or funky rainbow colors, you should complete any painting of walls and ceilings before the first piece of furniture or box ever enters the home. For kitchens and bathrooms, choose semi-gloss paints, as they are easiest to clean. Any other room can take any type of paint that you like. Make sure you use a primer first!

Consider an Energy Audit

If you’re buying a new construction home, an energy audit is likely unnecessary, but if you’re buying a home that others have lived in before, you want to consider one. Older homes are notorious for poor efficiency, especially if they haven’t had an energy audit in many years. You can call your local energy company and ask about this – usually they are done for low cost or free. During a home energy audit, the insulation levels, heating systems, cooling systems, and a variety of other areas and features will be inspected to see where improvements could be made.

Investigate Smart Home Technology

The possibilities seem endless when it comes to smart home tech, and the impact of smart home tech on real estate cannot be understated. You should explore the idea of smart home tech if it interests you. Perhaps you could install a thermostat you can control from your phone, a front door lock that works via fingerprint, sensors that can detect water in basements, or other smart home tech. Even if you’re wary of smart tech, it’s a good idea to at least explore the incredible technologies that are available.

Research Tax Deductions and Discounts

Many new homeowners don’t realize there are some awesome tax deductions for home buyers. After closing on a new home, explore all of the possible tax deductions and discounts available in your area, city, and state. If you don’t know where you should start, you can check with your accountant. An experienced accountant can help you understand taxes as they pertain to owning a home. You should also contact local municipalities and state offices about discounts that are available.

Set Up the Utilities

Some people don’t know that the city isn’t in charge of connecting their utilities – they are! Many utility companies have grace periods, but you can’t always assume that will be the case. The best plan is to call the utility companies and get service set up well in advance of your closing date. If they tell you they haven’t yet received cancellation notice from the seller, let the seller know to take care of that. Make sure you get this done expeditiously! You want there to be lights, gas, water, and internet when you move in, or your house will be dark, cold, and dry!

Being a homeowner is a fantastic thing, and there are things to do even after closing. As the years go by in a new home, the list of tasks can tend to grow, but owning a home is a great investment and accomplishment. One last tip – use your home inspection report as a resource. It will provide detail as to when certain things should be serviced, maintained, or replaced. Enjoy your new home!

Things You Might Not Think to Look For When Touring a House

What are the most important things you must do before buying a house? Being informed when you make a huge financial decision (such as buying a house) is greatly important. Take the time to educate yourself about what you are getting into before you commit to buying a property. Doing these things before you buy your new home will lead to a smooth transaction and a great first-time home ownership experience.

The most important thing is knowing what to look for when you’re touring a home. There’s a lot to see, and it can be easy to get distracted by little cosmetic things and totally miss a safety issue or a habitability issue, like mold or leaky pipes. You must have a strategy that helps you properly determine whether a home is a good fit for you. If you’re already touring a property, it’s safe to assume that you like the location, price, and bedroom / bathroom count – so what should (or shouldn’t) you look for and take into account when you tour a potential new home for the very first time?

You should look at…

The Exterior

Don’t forget to walk around the entire property on the outside. Pay attention to the condition of the roof and siding. Ask when the roof was last updated. Does the landscaping look like it will cost a lot of money and time to upkeep? If you don’t want to hire a gardener or do it yourself, how expensive would it be to remove the landscaping? Is there adequate parking space on the property? Do the doors and windows look secure? These are all important questions to ask.

Odors

Sometimes, it’s best to rely on our senses when touring a home. Your nose can often help just as much as your eyes when touring. Can you smell gas, mold, or mildew? The smell of mold is that of wet socks, while mildew tends to give off a musty odor. Gas will smell like rotten eggs. What about cigarette or pet smells? These may seem trivial, but these odors can cling to the walls and ceiling of a home, meaning that even if no one else in your house smokes, your guests might think you do! Fragrances used to mask these odors will be heavily perfumed, like candles or air fresheners, so if you smell an overwhelming scent of freesia or cinnamon, the current home owners may be trying to cover something up.

Wall and Floor Conditions

Look for warped wood floors, cracks in the ceilings, water marks, and dips in the floor. These can all be things that are indicative of bigger issues. Typically, hairline cracks that are bigger than 1/8 of an inch are okay, especially if they are running vertically. Cracks of any size that are running horizontally are not good, ever. These typically occur when a home’s foundation settles and are most often found around windows and doors. A warped floor can mean a myriad of issues from rotting wood to termites. Water damage can also wreak havoc on a home. Look for stains or bubbling on walls or ceilings, baseboards buckling, or pungent smells.

Integrated Fixtures and Systems

Sure, you can change the showerheads or the sink faucets if you don’t like them, but you’re stuck with your HVAC. Issues with integrated features can be big trouble. Look for issues in the electrical wiring, cooling systems, and heating systems. Check for exposed or eroded wires, HVAC systems with leaky ventilation, or leaking water heaters. Warm or vibrating outlets or flickering lights can be indications of issues with electrical wiring. If you turn on a faucet and see orange or brown water, the pipes are rusty. An AC unit that squeals needs replaced, and a faint gas smell in a room other than the kitchen can indicate a water heater with a compromised gas valve.

Unpermitted Additions

So you get to the house you intend to tour and find out that there’s one more bathroom than you originally thought. Cool, right? Not so fast. Before you celebrate, make sure that extra room is permitted. In addition to being a safety concern if not constructed properly, it can also be a financial concern. If you buy a house with unpermitted additions, you will be the one who gets hit with fines from the city (as well as the costs associated with getting the work permitted or removed). Look for converted garages, rooms with lower roof lines, or freestanding guest houses. A permit is required to remodel if the remodel includes adding or removing walls, making changes to plumbing or electrical, or adding a window.

Lawn Condition

Sure, everyone wants a lush, green yard, and a few yellow spots are okay – but when do they become a problem? Sometimes these spots are caused by fungal diseases in your grass. While not necessarily hazardous, the longer it goes untreated, the harder it will be to fix. Neglecting a fungal issue in a lawn can also bring about various pest infestations. Also check for inexplicably wet, soggy spots in the yard, especially if they’re accompanied by a foul odor. This could indicate a damaged or broken sewer line.

There are also some things you don’t need to worry about as much when you’re touring a home. If you can change it quickly and relatively cheaply by yourself, and it’s not a safety hazard, you can look over it for now and deal with it later.

Examples of things you don’t need to consider during a home tour are…

Furniture and Décor

Typically this will be the first thing you see when you enter a home. Sometimes it will vary greatly from your own personal style, but this is okay. Almost all of the time, when the current owner leaves, so to will their furniture. Don’t focus too much on these elements. They are not permanent. Try to envision the home with your furniture and décor inside, and use that to determine whether or not this is the home for you and your family.

Wall and Floor Treatments

So you hate the back door’s blinds – that’s okay! You can replace them later. You can paint over the garish lime green color in the living room, and you can also re-carpet the basement. These are some of the cheapest and easiest upgrades you can make to a home. Removing or replacing these things may cost a little money and professional assistance, but they’re all still fairly simple and low cost. Changing these small details is what will really make the home your own, and if you’re lucky, you’ll find some great hardwood floors under that carpeting in the dining room.

Small Fixtures

Cabinet doors, ceiling fans, microwaves, or chandeliers… What do all of these things have in common? They can very easily be replaced! These elements are simply cosmetic. They do not impact the safety or habitability of the home. Sellers are typically aware that these features are outdated, too, and will often take that into account when pricing their homes. Don’t worry about the little things – make the house your own later!

Bathroom or Kitchen Design

Is the bathroom off of the master bedroom smaller than you had hoped? Is the kitchen too large? If the amenities of your new home leave something to be desired, don’t worry. Take a minute to consider it. If you like everything else about the home but one room, are you willing to pass on the entire house instead of just updating the room to your liking? You can also increase your home’s resale value by updating these rooms. Just include the cost of remodeling the rooms into your listing price when you decide to sell the home in the future.

No Fence in the Yard

This one is easy. If there isn’t one, and you want one, build one! If there is one, and you don’t want one, get rid of it. If you have pets or small children, this may be pretty high on your list of “must haves”, but if the rest of the house is perfect except for the absence of the fence, buy the house and add the fence yourself! It’s a relatively inexpensive upgrade to your landscaping and in many areas you don’t even need a permit to put one up. However, you should still check with your HOA or your city regarding permit requirements, just in case, as well as height and setback restrictions.

Unless you are designing the home yourself and building it from the ground up, the chances of finding one that fit your wants and needs exactly are very slim. You must maintain a healthy amount of perspective during a home tour, and weigh your wants and needs properly. This can go a long way towards making sound decisions about this important financial investment.