Answers to Common Home Buying Questions in Lexington, KY
Buying a home in Lexington is a huge step in almost everyone’s lives. We are all in search for our dream home, but as the process goes on, we often get caught up in unexpected events, such as mortgage loans and affordability. To help clarify the home buying process in Lexington, we’ve compiled some answers to common questions buyers ask in the area:
What should I do Before Buying a Home?
Before you even think of looking for a home, there are several steps you should take in advance. If possible, get pre-qualified for a mortgage. Pre-qualification means that the bank has decided you can afford a certain mortgage amount. This indicates to buyers that you can afford their home. This is an especially good idea in a hot market where there may be many people bidding on a single property. A credit check is also essential, as is saving for an adequate down payment. Researching online can help you. Look for reputable real estate agents and stable banks.
How Much Can I Afford?
The amount of house you can afford depends primarily on your income. Ideally, you should take out a mortgage that is no larger than roughly one third of your take-home pay. The amount of the mortgage should include all property taxes on the house as well as any home improvements you think will be necessary. You should also budget about $100 a month for unexpected home repairs. Lastly, you should factor in closing costs, down payments, and homeowners association fees when budgeting out the home’s affordability.
Why Should I Buy Instead of Rent?
Buying instead of renting makes fiscal sense. Buyers, unlike renters, build toward their home’s equity. Each monthly payment goes toward their home’s future, while renting is just a check to stay there for that month. When you prepare to move, homeowners can possibly sell their home for a higher value (depending on the market), while renter cannot. In addition, to owning a home, you have full rights to customize it the way you want. There are no rules like an apartment complex.
How Do I Choose the Best Mortgage Loan?
Get multiple quotes from at least three lenders and compare what they offer. You wan to choose the best loan that fits your living style. Typically, mortgage loans have either 15 or 30 year lifespans. Fixed rate mortgages are loans that have a fixed interest rate for the life of the loan, while adjustable mortgage loans can change their interest rates depending on market conditions. Some loans may have higher down payment requirements while others have higher interest rates. It’s best to compare and make sure it stays within your affordable range.
What Should I Look for in a Community?
This depends on your needs and wants. If you have children, you will want a good school district for them that offers high test scores and low class sizes. Other considerations should be based on your likes and dislikes. If you love being in the center of activity, look for a place in downtown Lexington. Young professionals may prefer a place close to the workplace, as well.
How Do I Make the Right Offer on a Home?
That depends on the market. In a hot market, you may wish to make an offer at the seller’s price or even above it. In one where you have more leeway, many buyers start with a offer of roughly five percent below the listed price. Consult with your real estate agent for a list of what similar homes have sold for recently in the neighborhood. Use those lists as a guideline when putting in a bid.