Buying a home is one of the biggest financial decisions that you will make in your life. For a lot of people, this could also be the place where they live for the next 20-30 years. 

There is a lot that goes into closing on your new home. In Arkansas, the average purchase price of a home is just over $153,000

If you are thinking to yourself, “I want to buy a house,” then you need to know the biggest things that go into choosing the right home for you. Luckily, this guide can show you some of the top things that you need to keep in mind before making that final purchase. 

Setting a Budget 

The first thing that you need to do is set a budget for how much money you are willing to spend on a new home. This should not just be a number that you make up in your head. 

There are a few things that go into deciding what the appropriate budget should be for your home. The first is the amount of savings you have available to put down for a down payment. 

Putting more money down for this can help you in two ways. It can help decrease your future monthly mortgage payments and it can also make you have to take out less money for your home loan. 

Another thing you have to consider is the income you currently have and what income you expect to have soon. This will come into play when you are figuring out your debt-to-income ratio because it will give you an idea of how big of a loan you can afford to take out. 

If you are going for a conventional loan, mortgage lenders are going to want to see some proof that you can pay your loan back and meet your monthly mortgage obligations. 

That is not the only factor to this either. There are also other house expenses such as utilities, maintenance, and homeowners insurance that you need to account for. 

If you need help with this, the right real estate agency can give you an idea of what you can afford to put down on a house. 

Property Taxes 

Another thing that you need to keep in mind is property taxes. This is another yearly expense that you are going to have to consider for your home along with everything else above. 

If you are living in the same state, this is not going to vary as much. However, if you are moving to a different state, this can change significantly. 

Luckily for you, Arkansas is one of the 11 cheapest states in the country when it comes to the property tax rate. Its average is .62% compared to New Jersey, which has the highest rate in the country at 2.49%. 

This is money that you have to set aside every year depending on how much your house is worth. Let’s say you have a $200,000 house in both of these states. 

In Arkansas, that means only paying $1,240 per year in property taxes while in New Jersey, you would pay $4,980 in property taxes! Considering one is 25% of the cost of the other, this could be a factor if you are looking to move a far distance away from where you currently live. 

Credit Score

Something else that you should do before you buy your home is to make sure that you have a good credit score. Getting a credit report can allow you to see where you are currently at and make the necessary changes to improve it if needed. 

The reason why you should do this before you buy a home is that it can affect the interest rates you get offered for your mortgage loan. People with a higher credit score have a proven track record of paying their bills on time and are likely free of debt. 

With that in mind, lenders will feel more secure giving them a large loan compared to people that do not have this reliable track record. Improving your credit score can help you save money in the long run. 

Get a Home Inspection 

One thing you definitely want to do before you close on a home is getting a home inspection. The reason why you want to do this is that home inspectors are professionals that can spot any minor flaws with the home that may have gone unnoticed before the home was put on the market. 

If a home inspector finds some damage to the home and the land around it, this can affect a home sale because not every buyer wants to put in the work to fix these issues. It also can affect how much the home is worth. 

In this situation, you may always want to get an appraiser out there for a home appraisal to see if it is worth what the seller claims it is. Of course, lenders will typically send out their own appraiser regardless of the listing price. 

Still, this can save you future headaches and unexpected issues by doing your homework. 

Start Working on Buying a Home 

These are four of the biggest things that you need to keep in mind before you start to work on buying a home. You need to make sure you have the proper budget, work on your credit score, keep property taxes in mind, and get a home inspection. 

If you are ready to proceed from there, you can work with the best real estate agents in the Fort Smith area to buy or sell your home. 

Are you ready to get started? Find a home for you today. 

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