With mortgage rates lower than they have been in years, you’re probably thinking that it might be time for you to become a homeowner. Renters around the country are making the leap into their first homes. But do you know how to buy a house in RI?
It’s not as difficult as you may think! Just follow this guide on how to buy a house in RI and you’ll be sitting in your new living room in just a couple of months.
How to Buy A House in RI: The Complete Homebuying Guide
Start Saving for A Down Payment
The very first step in purchasing a home no matter what your individual situation looks like is to save for a down payment. Down payments can range between 3%-20% of the total cost of your new house.
The more money you save for your down payment, the less money you’ll have to pay for your mortgage. Once you hit 20% of the total home cost for your down payment, you won’t need to pay for PMI (private mortgage insurance). PMI is required when a lender looks at your loan as a riskier investment since you didn’t meet the 20% down payment requirement.
There are different programs that will help you with coming up with the down payment to buy a house in RI. RI Housing can give you more information on these programs.
Another smart move is to get in touch with a good financial advisor in RI to see where you financially stand to see if it is possible to buy a house at this time.
Financial advisors will go over all of your finances to see if now is the right time to buy a house in RI and also look into other ways you can maximize your finances like saving for retirement and saving for your kids’ college.
Make Sure Your Credit Is in Good Condition (And Fix What’s Needed)
Most lenders consider FICO® Scores of 740 or higher to be excellent ones. Some places, like quicken loans, require certain FICO scores® to buy a house in RI. Do you meet these requirements to buy a house in RI?
If not, here are a few steps you can take to increase your credit score:
- Sign up for Experian Boost, which will raise your credit score based on self-reported bills like Wi-Fi bills, electric bills, phone bills, etc.
- Make sure you’re paying your bills on time
- Don’t run your credit card up too high (this will decrease your credit utilization)
- Become an authorized user on someone else’s credit card as long as they are making payments on time
- Pay off your debt and collections
- Open a new credit card (only if there is enough time before you actually buy your home)
- Make sure that everything on your credit report is accurate (and that all of your debt is yours)
You can view your credit report for free from Annual Credit Report.com to see where your score is and how much you need to improve!
Look At Your Current Lease Before You Buy A House In RI
If you are currently renting, take a look at your lease to see if you’re able to get out of your lease with no penalty by purchasing a home. This is called a “home-buying clause” and allows you to terminate your lease early, as long as you give a certain amount of notice (typically around 60 days) and provide documentation of the purchase.
Get in Touch with A Personal Mortgage Advisor
Next you need to find a good mortgage advisor in RI to get you pre-approved for a loan. The application process is usually easy to do and online.
Pre-approval for a mortgage will tell you how much you will be able to borrow to purchase your home.
Find A Good Real Estate Agent
Finding a real estate agent is tricky because chances are, you know so many and don’t know who to choose. When picking your RI real estate agent, make sure you pick someone with good online reviews, someone that is referred to you by your friends and family, someone who is certified to sell you a home.
The difference between a good real estate agent and a bad one will show pretty quickly, so don’t waste your time on someone who isn’t going to put you into your dream home!
Pick Out Your Dream Home
This is the fun part! Now that you know how much you can get for your mortgage and have a good realtor on your side, you get to start home shopping!
Ask yourself these questions when picking out your dream home:
- How many bedrooms do I want?
- How many bathrooms do I want?
- How many floors do I want?
- Should I look into a duplex/triplex?
- What town do I want to be in?
- How old should the house be?
Although there are hundreds of questions you may ask to buy a house in RI, the biggest one would be: Will my family and I be happy here? This is the most important one. You may not get the perfect square footage or view, but as long as you’re going to be safe, happy, and financially stable, you know you’ve found your perfect home.
Make an Offer!
You’ve gotten through the fun part, now is time for the scary part you have to get through to buy a house in RI. Making an offer on your potential new house can be daunting as you might not have the best offer in the eyes of the seller. With a good real estate agent, you’re in good hands during the offer process. Don’t stretch your budget too thin to be in a bidding war with another buyer! Take a deep breath, what is meant to be will happen!
Get A Home Inspection
Things can get ugly during a home inspection, but it is absolutely vital that you get a good home inspector in Rhode Island when you’re offer has been accepted (but before you legally agree to buy a house in RI).
A home inspection will uncover any (and hopefully all) issues with the property and from there you can determine if you still want to purchase the property.
Select A Closing Attorney/Real Estate Attorney
Once you lock in the purchase of the home, you’ll need a closing attorney in RI to make sure that the property can legally be sold to you. This step is not one you would want to skip as you can run into a lot of issues in the future if something in the deed or any contracts you sign are missed when you buy a house in RI.
Apply for A Mortgage To Buy A House In RI
Now that you can legally buy a house in RI, you need to take your pre-approval from earlier in the process and make it official! Applying for your mortgage will be easy to do once you have all of the above steps completed. Make sure that you lock in your interest rate (especially since they’re so great right now) so that you don’t end up paying for more than you need to.
Purchase Home Insurance
Buying home insurance is rarely fun. But with a good homeowners’ insurance agent, you know that you’ll get the best price for the best coverage for your new home.
Al Robinson from Lapointe Insurance is The Fresh Prince of Deductibles here in Rhode Island. Who wouldn’t want to buy insurance from this guy?!
Put Together an Emergency List
Before you can enjoy the perks and peace of being a homebuyer, you need to plan for emergencies. Here are a few people and places you should have on-call for when you might need them:
- Property Damage Restoration Company
- Roofer
- Pest Control
- Plumber
- Electrician
- HVAC
- Handyperson
- Home Security Company
Most importantly, you should have a good public adjuster in RI to represent you against your insurance company in case you have a property damage insurance claim at your new house. We’ll get you the best settlement for your claim and take the stress off of your shoulders during the claims process.
Get The Most Money for your claim in
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Enjoy Not Throwing Your Money Away on Rent!
You did it! You bought your very first home. Now sit back, relax, and enjoy being a homebuyer!
If you, unfortunately, have an insurance claim in your new home, give us a call to take you through the claims process and ensure that you get the most money for your property damage insurance claim!
