Buying a home in Pennsylvania doesn’t need to be complicated – with the right representation and resources, you should be able to secure your dream home in due time.
Assess your financial situation
When taking out a mortgage for your home purchase, your overall financial health will inevitably impact your real estate options. There are several factors that can help you determine your financial wellness before buying a house:
- Credit score – Though low-credit loans like FHA or VA loans are available for eligible borrowers, most homebuyers should have a credit score of 620 at the very least in order to qualify for most conventional loans.
- Down payment – Lenders typically require a 20% down payment for conventional loans.
- Closing costs – Buyers usually pay 2% to 5% of the sales price in closing costs.
- Debt-to-income ratio – Generally speaking, it’s ideal for borrowers to spend less than 36% of their monthly income on debt (including anticipated mortgage payments).
- Homeownership costs – The on-going costs of homeownership vary based on the size and location of the property, but generally speaking, you should have 1% of the home’s value saved each year for maintenance and repairs.
Other costs and expenses include:
- Loan application fees
- Appraisal fees
- Inspection fees
- Homeowner’s insurance
- Title insurance policies and fees
- Property taxes
Luckily, there are several down payment assistance programs in Pennsylvania, including the HOMEstead program, which covers up to $10,000 for eligible borrowers who meet income and purchase price requirements.
Assemble the right team
The State of Pennsylvania requires the involvement with a real estate attorney in every home sale. A well-connected agent should be able to make recommendations. If you aren’t already working with one, it’s worth consulting with several agents who specialize in Pennsylvania real estate before choosing one with the right expertise.
Get pre-approved by a mortgage lender
Most sellers won’t entertain buyers who don’t have a pre-approval letter. Getting pre-approved for a mortgage gives the seller the assurance that you’ll secure financing and close the sale.
- Interest rates – Several factors including your financial health, economic conditions, and length of the mortgage will affect your interest rate. A lower interest rate can save you thousands over many years.
- Lenders – Choose a lender with a proven track record for the best terms and conditions.
- Finances – Keep in mind that any major changes in your credit score or finances can void your pre-approval. It’s wise to avoid making major purchases before and immediately after getting pre-approved.
Choose the right lender
Delays in the underwriting process and paperwork can derail the whole transaction. That’s buyers should find a lender who will actively work with them to make sure that the deal pushes through. Shop around and speak with multiple lenders in order to find the best interest rates and a committed lender who will process your loan application diligently.
Choose the right property and neighborhood
Now that you know how much home you can afford, you need to decide on the kind of layout and features you’ll need. The neighborhood also matters a great deal,
When deciding which neighborhood to move into, these factors can help guide your choices:
- Home values in the area – Do research on average home values in the neighborhood of your choice. This will help you determine whether or not you can afford to live in the area. You’ll want to live a neighborhood that fits your budget, but which also has good home appreciation for when you decide to sell.
- Lifestyle – Your location affects everything from your daily commute to your child’s education. You’ll need to evaluate how well each area meets your personal needs and preferences.
To narrow down your choices, look into neighborhood features such as:
- School districts
- Transportation options
- Walkability
- Amenities (shops, restaurants, parks, etc.)
Some factors to consider when looking at different properties:
- Priorities – Make a clear distinction between your wants and needs to streamline the search process. Having realistic priorities and knowing where to compromise can make the home search faster and less stressful.
- Housing inventory – How many active listings are in the market, and how many options can you choose from? If there are fewer listings in your price range, you’ll have to manage your expectations.
Make an offer
Once you find a home that suits your needs, you have to make a strong offer to convince the owner to sell to you and not someone else.
- Act quickly and decisively – Don’t wait too long to put it an offer if homes are going off the market quickly.
- Sweeten the deal – Offering a higher price isn’t the only way to get the seller to accept an offer. You can sweeten the deal by including no contingencies in the contract, for example.
If you’re in doubt, consult with your agent. They’ll let you know how soon to make an offer based on market trends and data.
Home inspection tips for buyers
Don’t skip the home inspection when buying a home. This will help you avoid buyer’s remorse later on when you uncover major defects with the property. During a home inspection, a licensed professional will check the house for unseen or potential issues with the following components:
- Foundation
- Roof
- Plumbing
- Electrical system
- HVAC system
- Septic system
The State of Pennsylvania also recommends the following inspections and testing in addition to a general inspection:
- Termite inspection – If you want to qualify for an FHA or VA loan in Pennsylvania, you’ll likely be required to conduct a termite or pest inspection.
- Radon testing – Getting a home tested for radon levels isn’t required by law, but it is strongly recommended prior to closing.
Do the final walkthrough and close the sale
When you’re ready to close, you’ll have the opportunity to do a final walkthrough of the home to check it’s in an acceptable condition. Your agent or real estate lawyer will explain each document before signing and answer any questions you might have about the paperwork.
For more inquiries on buying a home in State College, PA and the surrounding areas, feel free to contact the Heritage Realty Group, Inc. here. You can also reach our agents at 814.231.0101 or email us at RLHoman363(at)gmail(dotted)com for more information. We’ve been assisting buyers and sellers in Pennsylvania since 1987. We can’t wait to help you find your dream home in Keystone State.