Purchasing a house is a huge decision. It is one of the most significant investments a person can make in their lifetime. It is crucial for home buyers to make the necessary preparations to ensure you enjoy a pain-free and successful transaction.

To help avoid costly mistakes and have a stress-free home buying experience in Bayfield County, here are a couple of things you need to know before buying a home.
Adequate research is important

The first step towards a smooth home purchase is to do your research. This part is an aggregate of smaller tasks, which include:

  • reading about the local housing market;
  • identifying your target areas;
  • learning about the different types of mortgages available;
  • scrutinizing your financial capability; and
  • streamlining your list of must-have and negotiable features.

By the end of this stage, you should have a clearer grasp of  the type of house you want, how much of it you can afford, where you want to live, and what it will take to achieve your real estate goals.

Shopping and applying for a mortgage takes time

Finding the right loan from the best lender can be time-consuming. The market is saturated with many financing options, not to mention lending institutions.

If you have already done your research, you should have an idea of which loan to get. Past that, applying for a mortgage loan takes 45 to 60 days, sometimes even longer, depending on the lender and/or if any financial issues were uncovered.

With this in mind, it is highly recommended to shop and get pre-approved for a mortgage before you begin your home search. When you do start looking for a home, you can sweeten your offer by presenting your pre-approval letter, a document that conveys you are financially ready to purchase the home.

Read this article to better understand how time-consuming getting a mortgage can be.

Hire a real estate agent

Hiring an agent is highly recommended, regardless if it is your first or fifth time purchasing a house. Doing so is especially helpful if you are purchasing a property in a housing market that is relatively new to you.

The benefits of working with a skilled local realtor are manifold. These professionals have an expert knowledge on the local market. They can take a closer look at your options and help determine which one is the best deal.

Most experienced realtors also have a wide network of real estate contractors− they can easily connect you to the right person, whether it is a home inspector or an escrow agent.

There are many costs to buying and owning a home

The price of the house you are buying is not the only cost you will incur in the home buying process. There will be closing costs, which may or may not include the appraisal fee, lender’s title insurance, inspections and testing, and the like. Hence, we advise home buyers to adequately save up, not just to cover the down payment and other upfront costs.

The expenses continue well on to homeownership. If you obtained a mortgage loan, you will make monthly amortization payments after closing. Property taxes and homeowners insurance are also part of your responsibility. Some buyers choose to escrow these payments along with principal and interest for consistent monthly payments. There will also be utilities to pay for, such as water, sewer and electricity.

You do not always need 20 percent down payment

20 percent is what most lenders like. Paying a higher down payment for your mortgage has many benefits. It can mean lower monthly payments for you and even more equity in your home.

In reality, you can put as little as 3 percent down for your mortgage. There are loan programs available, especially for first-time home buyers and veterans, that help make this happen. Explore your options more carefully and ask your realtor for advice.

If you cannot make a 20 percent down payment, lenders will require a private mortgage insurance (PMI). This is a protection for the lender should you default on your mortgage loan. Rates range between 0.5 percent to 2 percent of the total mortgage loan annually. You will need to pay for the PMI each month, together with your amortization.

As this will impact your home purchase and your monthly expenses, ask prospective lenders about their PMI policies.

Explore homes for sale in Bayfield County, WI

Looking to buy a home in Wisconsin? We can help you find your dream property in Bayfield, Washburn, Cornucopia, and the surrounding areas. Contact us today, to start your home buying experience with Windseeker Realty.

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