The purchase of a home is a rite of passage for many people. There is essential information that every homeowner should know before purchasing a home, and in this piece, we’ll delve into some of this material. First, we’ll explore the financial decisions you must make when buying your home. Then we’ll discuss some home insurance basics, including when you should have coverage for your new acquisition.
Find Out What You Can Afford
A primary component of buying a home is based on financials, and it’s not as simple as walking into the bank and asking for a home loan. You’ll need to figure out how much home you can afford and how much money you may need at specific points of the home-buying process. Having a handle on the financial terms and components of home buying can help you be more informed and more capable of answering questions a real estate agent and your bank or mortgage broker may have.
It’s best practice to contact a lender when you’re ready to begin shopping for your home. You typically cannot make an offer on a home until you’ve gotten a preapproval letter from a bank or broker. One of these professionals can help you review your financial history, including your assets (e.g., the money you could use for a down payment), credit history, debt-to-income ratio and income to determine how much home you can truly afford.
They can also go over the various mortgage types available to you and the potential additional costs (e.g., earnest money, inspection fees, property taxes or private mortgage insurance) you’ll need to account for when factoring what your monthly payments could be.
Work With a Real Estate Agent
After you’ve gotten your preapproval letter and understand what budget you’re working with, it’s recommended that you enlist the help of a licensed real estate agent to find the home of your dreams. A real estate agent can help you navigate the market and facilitate the next steps of submitting and countering offers, requesting an inspection and preparing for closing day. Ask your family and friends for recommendations of agents they’ve used and trust.
Don’t Wait Until the Last Minute to Secure Home Insurance
Almost all lenders require prospective home buyers to show proof of home insurance before final approval of the home loan. Home insurance coverage may give you invaluable protection if you sustain damage to your home or belongings or if you or another insured is injured on your property. A policy may even cover additional living expenses if you need to live elsewhere because a covered event damages your home. This coverage may include hotels, meals and other costs—up to your policy limit. Don’t wait until it’s close to closing to begin your search for home insurance. As you begin your home-buying journey, you should reach out to a local agent who knows the market, such as Tennessee Auto Insurance Agency, to learn more about the available home insurance options for you.
Learn More About Home Insurance and Purchasing Today
Call our Tennessee Auto Insurance Agency professionals to get more information about homeowners insurance and what coverage may be needed for your location in Tennessee. Supplemental coverage may also be beneficial, and we can discuss if additional insurance might be worthwhile to protect your valuable investment further.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.