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Buying your first house is already an intimidating event. Buying and moving out of state can add a whole new level of fear. But this is supposed to be an exciting time! Whether it’s a new job, a new relationship, or simply a new adventure, there are many reasons to look for your first out-of-state home.
With the proper research and planning, buying your first home out of state doesn’t need to be scary. Thanks to technology, planning your move can be easier than ever, even from a different location.
Let’s look at some ways that you can make the right moves towards your out-of-state home purchase.
First Steps for Buying an Out of State Home
Likely to be the first step of many, you should start planning far in advance. Closing on a home can take time but relocating to a different state will certainly add to the homebuying timeline.
Research, Research, Research
You likely already have a state or city in mind that you’d like to go to, or at least a few ideas. Even if you have already decided, do thorough research on the area, particularly on the cost of living. You don’t want any surprises once you get to your destination.
You could ask around on social media, read the local news, and maybe talk to your future coworkers in that area. You can also get an idea of the demographic by checking out the Census online.
Other things to consider about your potential new hometown are the weather, the crime rates, economic conditions, recreation, and anything else that will be a significant part of your life there.
Make a Plan
Since there are so many factors to consider, you should make a timeline and give yourself deadlines to get different things done. Especially if you already have a new job lined up or a date that you need to be out of your current home, you’ll need to make sure that no task falls behind. Make a checklist of everything you need to do, and figure out when you’ll need to get them done.
You can also plan for the things that you want and need in your first home. Some things you’ll need to decide before your house hunt include:
- How many bedrooms do you need?
- Do you need an outdoor area for kids or a pet?
- Do you need to be near public transportation or a school district?
- Are you willing to make repairs or do you prefer a turn-key house?
Prepare Your Finances
This step could take the longest, depending on when you decided to purchase your first home. Buying a home will be the biggest purchase you make in your life and moving states will add expenses. Make sure that you have enough saved to afford everything you’ll need to purchase the home and have a financial cushion for the unexpected.
Down-payments for a house can range anywhere from 3% to 20% of the home’s price. The more you pay on your down payment, the lower your monthly payment is likely to be. That’s why it’s crucial to build a solid savings plan and have it in place before buying a home.
Along with saving, you will need to pay off outstanding debts before you get pre-approved for a loan. You’ll want your Debt-To-Income (DTI) ratio* to be under 50% before you apply for a mortgage since this will affect your chances of getting approved.
*Debt-To-Income (DTI) ratio is monthly debt/expenses divided by gross monthly income.
Work with a Trusted Lender
Start the pre-approval* process with a trusted loan professional, whether that be in your current state or your new one. Ask if the loan officer is willing to communicate virtually if they’re out of your current state.
They’ll be able to answer all of your questions and help to get you in the right place for the application and approval process. They can also help you figure out things like how much home you can afford, how your credit score will affect a loan, what fees you should prepare to pay, and other things that first-time homebuyers might not know about.
*Pre-approval is based on a preliminary review of credit information provided to Homefinity which has not been reviewed by Underwriting. Final loan approval is subject to a full Underwriting review of support documentation including, but not limited to, applicants’ creditworthiness, assets, income information, and a satisfactory appraisal.
Find a Buyer’s Agent
When you’re buying an out-of-state home, it’s tempting to look at the endless online listings in different locations and directly contact the agent representing them. However, those agents will be looking out for the best interest of the seller. Find a buyer’s agent in the place you want to be. Their job is to represent the best interest of their client to the best of their ability.
Agents have access to nationwide databases so talk to a local real estate agent in your current area and they may be able to refer you to someone in your new state. It will feel much better to have a professional recommendation than to take your chances with your own research online.
Get an Inspection
Once you find a home you think will be right for you, get a professional inspection done. This is required for many sales contracts but you should still arrange it yourself before you make anything official.
An inspector will check things such as the home’s foundation, the roof, the HVAC system, plumbing, electrical, and other areas that could need potentially costly fixes. This will save you a lot of trouble down the road as you don’t want the first home you buy to come with any hidden problems.
Perhaps you’ve already been to the place you want to move and that trip is what inspired you to relocate. But if you’re moving somewhere you haven’t been before, it’s always a good idea to visit the area before you go, to make sure it’s the right move for you.
It’s also almost never a good idea to purchase a house without seeing it in person, so you should already be planning to make a trip before you buy.
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Start the Homebuying Process Today
Now that you have an idea of what you need to do before purchasing your first out of state home, look into what specifically will work for your needs.
Homefinity can work with you on your first home loan from start to finish. Our experienced loan officers can make the best recommendations for your financial situation, and help you feel confident in your first mortgage.
Get started by reaching out to Homefinity today, and take the next big step in your journey.