Are you ready? Just because Charlotte is still touting a strong economy and a buyer’s market, does not mean that this is necessarily the right time for you to buy. You need to consider if you are in a steady job with stable income. Are you planning on staying in the Charlotte area for a few years, maybe longer? Do you have money saved for a down payment, closing costs, additional furniture, and emergencies? Do you have an excessive amount of debt? Is your credit rating good?
Buying a new home almost always costs more than you expect, so make sure your finances are in order first!
What is your budget? There is no doubt that even in Charlotte, the cost of living has gone up. Everything from gasoline to groceries costs more than it did a year ago, and it is likely to continue to rise. If you are financially able to make the commitment to buy, then you need to determine how much house you can afford. Generally, the best way to do this is to get pre-qualified for a loan.
There are three options for pre-qualifying for a home loan:
1) Work with a lender with whom you already have a relationship
2) Follow your real estate agent's recommendations for a lender
3) Find and research lenders online
Your total monthly mortgage payment, (principal, interest, taxes and insurance), should not exceed 30 percent of your monthly gross income. Figure out this number but also talk to your lender to get a better feel for how much flexibility you might have.
Many first-time buyer mortgage programs require only a low down payment or even no money down, or programs with no closing costs. There may also be down-payment assistance programs available in your community. But the best option is to put down more if you can swing it. The bigger the down payment, the less you're borrowing, and the less expensive your mortgage will be in the long run.
What is available? In Charlotte and around there are plenty of great places to buy a home. The hardest part is decided what and where. The first step is to research the area online and even drive around to get a feel for the different towns/villages. Also you will want to decide what type of home, (one-story single family, condos, or town homes). Having this background research done will save you—and your agent time later on.
Choose a neighborhood. Once you know type of home and the area of Charlotte you would like to settle in, you can look at specific neighborhoods. Visit during the day, and also in the late afternoon and night to see what the neighborhood is like at all times. If you have children, look for other young families and ask about the schools. Also important is proximity to shopping, transportation, and the schools. These are things that you can do on your own, but your agent may also be able to give you some additional information when you have narrowed the search down.
Home inspection. As the home buyer, you will need to get a home inspection. In fact, you will likely not want to make any offer you make on your new Charlotte home contingent on the inspection. A home inspection is always worth the investment and we can recommend great home inspectors in the Charlotte area.
Homeowners insurance. If you are borrowing money for a home—having a mortgage, you will be required to have homeowner’s insurance. However, homeowner’s insurance comes in a wide variety of options, so it is important to balance your needs and your budget.
Making an offer.Once you've found the house you want, you should work with your agent to determine an appropriate offer. Generally people offer slightly less than the asking price, and expect to get a counter offer. Know what you are willing to accept, and try not to draw this negotiation out too long.
Closing. Some states require an attorney to review the closing papers and to be present at closing. But if this is not the case in your state, it is still a very good idea. An attorney will look out for your best interest, and is a great asset—especially to the first time home-buyer. (We can also recommend some great real estate attorneys in North and South Carolina!)
Good luck with your new home in Charlotte, NC!