Whether it’s your first time, or fifth time, buying a home is exciting and marks a major milestone. For those new to the process, it can be overwhelming as there are many steps before the keys are handed over.

If you’re looking to begin the homebuying process, below are some important do’s and don’ts to keep in mind.

Do – Get Preapproved For A Home Loan

If you’ve determined homeownership makes sense for you, one of the first steps includes working with a mortgage lender to become preapproved for a home loan. Of course, cash is always the best option when buying a home, but it’s not practical for most people. Typically, you’ll be asked for proof of income, a list of assets you own, and employment verification. A copy of your credit report will also be pulled. Depending on the type of loan, individuals can be approved with a credit score as low as 580, but keep in mind, higher scores tend to receive the best interest rates.

Once all documentation is in order and you meet the qualifications, you will receive a letter that includes the maximum loan you can take out, better known as a preapproval letter. Keep in mind, just because you are preapproved for a certain amount, doesn’t mean you have to take the maximum amount. The higher your loan is, the higher your monthly mortgage payment will be.

Don’t – Forget To Estimate Closing Costs

Expenses for a new home include much more than the buying price and down payment, and they can add up quick. Additional costs include home appraisal fees, underwriting fees, survey fees, title insurance and homeowner’s insurance fees, and curtain costs (new furniture, appliances, etc.).

Typically, these additional costs will total out to about 2-5 percent of your home’s value. It’s highly recommended that you factor in these costs when determining how much of a down payment you can afford.

Do – Find A Real Estate Agent

This is a very important step in the homebuying process. By hiring a Realtor, they will help guide you through the process of finding and buying your new home, answering any questions you may have along the way.

An agent will take the time to get to know you and will do the research it takes to find a home that best suits your wants and needs.

Don’t – Make Big Credit Card Purchases Before Closing

It may be tempting to splurge on that new set of patio furniture or buy a brand-new TV for the living room, but you’ll want to hold off until the keys are in your hand if you’re planning on charging it.

Though you may be in the final steps of the homebuying process, mortgage lenders will recheck your credit report to see if you have incurred any additional debt before the closing. If your debt-to-income ratio increases, it’s an indicator that you pose more of a risk when it comes to making mortgage payments, a red flag to lenders.

Keep in mind, a mortgage can be denied any time before closing.

Do – Your Research

You don’t have to make an offer on the very first home you see! Take the time to compare several homes.

After you receive your preapproval letter and set a budget for yourself, it’s time to do some research. It’s recommended you compile a list of home features you’re looking for. If you’re buying a home with someone else, make two lists and compare. This will serve as a foundation for your realtor when looking for homes that suit your needs.

Don’t – Let Your Emotions Run The Show

It’s unlikely you’ll fall in love with the very first home you come across on Zillow. Finding a home takes time and patience.

Don’t become emotionally attached to a home before it is yours. Keep your options open.

 If you’ve found a home that fits your liking, it may be time to make an offer. Remember, like a job interview, you may be up against others when placing an offer on a home. If someone else ends up making a better offer, don’t give up. Continue searching for your dream home.

The Bottom Line

Taking the leap into homeownership doesn’t have to be a dreadful experience. The Russell Company is here to lend a helping hand and make the process as smooth as possible. It’s our mission to help guide you through the homebuying process and help you find the home of your dreams. Give us a call or send a text today at 765-497-0700.

You’re looking to move soon, and a big decision has been weighing on your mind – should I buy, or should I rent? Maybe your lease on a rental is about up and you’re ready to take on the responsibility of homeownership. Or maybe you’re already a homeowner and you’d like to shed some of the responsibilities that come along with it.

Everybody has their own personal situation, but there are advantages and disadvantages to consider when deciding which route to choose.

At The Russell Company, our team will help guide you through your decision and answer any questions along the way.

Buying

Buying a home is likely the largest purchase most people will ever make. When considering homeownership, there are many things to keep in mind, especially finances.

One-time costs when buying a home

• Down payment: If you’re looking for a home loan, many lenders require you to put down 3-20 percent as a down payment, depending on which type of loan you go with
• Closing costs: Fees associated with a mortgage, usually 2-5 percent of the loan principal. How much you pay depends on the price of the home
• Upfront costs: Funds a buyer will need to have readily available to pay during the buying process (after pending the sale, but before the final closing). These funds will need to be available, liquid funds (not charged to a credit card, draining a savings account, etc.)
• Earnest money: Ideally 1% of purchase price or $1,000 for every $100,000 that’s being purchased
• Appraisal fee: Usually $400 – $500 paid directly to your lender
• Inspection fee(s): Usually $400 – $1000, depending on the types of inspections you’re having done
• Curtain costs: Things you don’t anticipate buying once you move in, but you’ll likely need or want. Examples: curtains (ahem, aptly named costs, eh?), shower curtains, shower rods, trash cans, etc.

Ongoing costs

• Mortgage payments: Payments you will make each month towards your principal loan amount
• Property taxes: These are taxes paid on a property owned by an individual or entity. These are paid annually and calculated based off how much property is valued at
• Homeowners and hazard insurance: Insurance to protect your home. Required to qualify for a mortgage
• Private mortgage insurance (PMI): Type of mortgage insurance you may be required to pay if you have a conventional loan and put down less than 20 percent of the home’s purchase price
• Homeowners association fees: Fees paid by the owners of select residential properties. Used to maintain and improve the neighborhood
• Utilities: This includes water, electric, gas, trash, sewage, etc.
• Maintenance and repairs: Anything that can and may need to be maintained or repaired within your property

Pros

• More privacy! You don’t have to worry about a landlord showing up whenever they please
• If real estate prices are on the rise, you could walk away with a profit if you decide to sell your home
• You are able to customize your home to your liking cosmetically!
• Mortgage payments could be equal or less than monthly rent payments
• You don’t have to worry about having guests stay over or being limited to what kind of pets you can have

Cons

• More difficult to quickly relocate if needed
• Responsible for repairs, maintenance, taxes, homeowner’s insurance, etc.
• Upfront costs can be costly – down payments, closing costs

Renting

When renting, you’re usually chipping away at someone else’s mortgage. While you’re not building any equity, the responsibilities of homeownership do not fall on you.

One-time costs when renting

• Application fee: A fee charged when a potential tenant is looking to sign a rental lease
• Security deposit: Once a tenant is approved for a lease, the tenant is usually required to put down a month’s rent as a security deposit. This can be thought of as insurance in the case that the dwelling is damaged, or the tenant misses a rent payment
• Pet deposits: A fee paid upfront and monthly depending on what kind and how many pets you have

Ongoing costs

• Monthly rent: The amount of money due each month as listed in your rental agreement
• Utilities: Varies depending on your rental agreement
• Renter’s insurance: This is coverage designed to help protect a renter’s dwelling

Pros

• Not responsible for repairs and maintenance
• Can easily relocate if need be
• Upfront costs are much lower
• No homeowner’s association dues

Cons

• Can’t customize cosmetically to your liking
• You are not building equity
• Rent payments could increase. Decision left up to the landlord

Whether you decide to buy or rent, The Russell Company is here to guide you through the process step by step. Give us a call or send us a text today at (765) 497-0700.

 

 

 

 

 

 

 

Let’s face it – none of us like to hear our local meteorologist mention severe weather in the forecast, besides maybe those who make a living chasing severe weather. But it’s something that all of us have to deal with no matter where we live.

During the last week of August, Hurricane Laura battered the southern United States, leaving behind a swath of destruction. Making landfall as a Category 4 storm, Laura ravaged homes, businesses, and everything in between, leaving residents picking up the pieces for the many weeks, months, and likely years to come. Unfortunately, the storm also claimed several lives.

While we won’t take a direct hit from a hurricane here in Greater Lafayette, we’re certainly not excluded from severe weather events. Flooding, windstorms, hailstorms, tornados, and brutal winter storms have all been known to wreak havoc here in the Midwest and cause their fair share of damage.

While we can’t stop these acts of God from happening, there are steps that we can take before a storm makes its way through the area to protect not only our valuables, but most importantly, ourselves.

What to do before a storm hits

Your home is likely your most valuable asset, and you want to make sure that it is protected.

“Properly maintaining your home will likely lessen damage during a storm,” said Kurt Watt, an agent with Reliable Insurance Solutions in West Lafayette.

Watt suggests homeowners keep trees around your home well maintained, including trimming dead branches and branches near the home.

If severe weather is predicted for your area, there are certain steps you’ll want to take. “Preparing before the storm should include putting away patio furniture and umbrellas/canopies,” Watt said. “Assess your home for loose items and tighten gutters, shutters, railings, etc. If you have a trampoline, anchor it to the ground.”

You’re also encouraged to create an emergency kit. If your town or city sustains widespread damage, it may be difficult obtaining what we consider everyday items.

When stocking your emergency kits, you’ll want to consider the following:

• Water
• Food/Snacks
• Medication
• Emergency radio
• Flashlights
• Batteries
• First aid kit
• N95 masks
• Ponchos
• Thermal blankets
• Tarp
• Moist towelettes/toilet paper
• Basic tools
• Portable battery for cell phone and other electronics
• Cash

Also, premade emergency kits are readily available at retailers or online.

In addition to having emergency supplies on hand, it’s recommended that you familiarize yourself with your homeowner’s insurance policy. “If there is a sump pump in the home, you’ll want to ensure your policy includes “sewer & drain back-up” coverage,” Watt said. Other coverages not typically included in the basic policy that you may want to consider include earthquake and flood coverage.

Watt also encourages homeowners to practice good risk management. “Think through what you may do differently if a storm damaged your home,” said Watt. “What if your basement flooded due to loss of power and your sump pump stopped working? Good risk management may include putting belongings in plastic storage bins and keeping them off the floor.”

After a storm hits

Once the storm passes and conditions are safe, the next step is to evaluate any damages.

If there is damage to your home, you’ll want to evaluate whether it’s safe to stay there. “If power lines are down, call the utility company immediately and stay away from the downed lines,” said Watt. “If safe, take reasonable actions, such as covering broken windows or putting tarp over a hole in your roof, to prevent further damage.”

As soon as it’s safe to do so, call your insurance agent and notify them of any damage. After that, make arrangements to find alternative housing if your home is not safe to stay in.

Severe weather can occur any time during the year here in Indiana. While damage from a storm can be devastating, it’s important to keep in mind that homes and other property can be replaced, human lives cannot.