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Thinking of Buying a Home? Here's How to Start Your Property Search

Buying a home tends to be the biggest investment that most people will make in their lives. And for some, it may be the home that they will spend the next 30+ years in. 

The average price of a home in San Diego is about $1 million in 2022. 

This can be daunting for someone looking to buy their first home. If money is not the issue, you may be wondering what type of home you should get. 

One key to this is to do a property search of possible homes that you might be considering. 

So, if you are looking for a home, what should you start looking for? What are the most important things to look for in a home? This is your guide. 

Determining a Budget 

The first thing that you need to establish is how much home you can afford. To do this, you need to look at two things before diving deeper. Those two things are how much savings you have to put towards a down payment and how much the household income is. 

The household income can help give you an idea of how much money you can put towards household expenses such as monthly mortgage payments, homeowner's insurance, property taxes, utilities, and general living expenses. 

Of course, when it comes to determining an exact budget, how much you can put down as a down payment will be a vital part of this process. This is because it will determine how much money you will need to ask for a mortgage loan. 

With the above in mind, that affects how much money you will have to pay every month through mortgage payments. Make sure you know that in advance as well as your household income to properly come up with how much house you can afford. 

Finding a Good Mortgage Rate 

The next thing that you need to do is find the best mortgage rate possible for your house. In San Diego, houses are worth seven figures, so even finding something that has a one percent difference can be about a $10,000 difference in what you owe on that mortgage. 

Part of this situation can be lucky with timing when it comes to this. That is because, at the end of 2020, the average mortgage rate in the United States was around 2.8%. However, in August 2022, that skyrocketed to about 5.2%

Luckily for you, there are plenty of lenders out there for mortgages, so you may be able to shop around and find the best deal possible for your mortgage rate. Considering how much you are going to invest in this property could make a significant difference when it comes to how much money you will pay every month on your mortgage bill. 

Manage Your Credit Score 

Another thing that you need to do before you make an offer on your house is managed your credit score. Your credit score could very well be the difference between whether or not you even qualify for a mortgage. 

While not every situation is that extreme, it could also be the difference between getting quoted for a 5% mortgage rate and a 7% mortgage rate. 

So, those of you that are new to buying homes may be wondering why there can be such a big difference in rates. The answer is that if you have a strong credit score, you are perceived as much more likely by a lender of being able to pay off the mortgage. 

Credit scores are usually strengthened by years of reliable spending and making sure you are managing debt and paying off all of your bills on time. Lenders take note of this, and when you are talking about something as big as buying a house, lenders have enough skin in the game to make sure they do their homework on if you can pay it back. 

Coming up With a Down Payment 

Relating to most of the points that were mentioned above, it will be essential that you have enough money for a solid down payment on whatever house you want to buy. One of the biggest reasons why this is so important is because whatever money you put down is money that is not having interest put on it in a mortgage loan. 

Another big reason why you will want to properly organize your planned down payment is that if you do so successfully, you will most likely save yourself from an extra monthly expense. 

This monthly expense occurs if you do not have enough money on your down payment to gain the trust of your lender. The general rule is that you need to put down at least 20% of the total cost of the house on your down payment. 

If you do not do this, then the lender will likely charge you a private mortgage insurance(PMI) fee. This can be a couple of hundred dollars every month and the reason this fee is put on is that it covers the lender in the event you cannot pay off your mortgage. 

You should make sure you have at minimum 20% of the total house cost ready to put down as a down payment. Ideally, you will want to pay off as much of the house as you can afford immediately. 

How Much House Do You Want? 

This question is not exactly about your budget as mentioned above but more so about how big you want your house to be. 

You are going to have to ask yourself basic questions like how many bedrooms do you think you need? How many bathrooms are you going to need? 

Then, there are other less specific requests, such as the square footage of the house. You may be someone that wants more space in the house or someone that just does not care. 

Also, you could be someone that wants a big front lawn that is not far from your neighbors. Or, you could want a big backyard that is capable of hosting gatherings for your family and friends. 

If location and budget are flexible, come up with a list of the biggest priorities that you are looking for from actual physical property. 

Choose Your Neighborhood 

Along with choosing how much house you want and what your budget is, you should have an idea of what neighborhood you want to live in. 

You might want to be in a neighborhood that has above average safety statistics. If you are a new parent, you may want to be in a good school district for your children. 

Then, there are more personal needs, such as being in a town with a more open nature, a convenient suburb that offers the best of both worlds, or in the middle of a city where everything is walkable. 

Besides all of this, you may need to choose a neighborhood that is close to where your primary earner is going to work. 

You need to decide what your biggest priorities are when it comes to choosing a neighborhood. It is possible that you may pick one because it is affordable or it has the right type of house that you are looking for. Nevertheless, make sure you look into these options. 

Make a House Offer 

Finally, after you settle all of the points mentioned above, you are ready to make an offer on a house. You need to figure out what house you want and what your opening offer is going to be on said house. 

When making an offer on a house, you need to remember to leave yourself room to negotiate the offer. Of course, this includes the money that you are going to pay for your house. So, if you are approved up to $1.1 million in San Diego, you should consider shopping for homes that are slightly under this price should you need to offer more to be competitive. 

However, it is not just about the money you offer. You can negotiate other aspects of an offer such as it is pending a home inspection to make sure everything is in order. You can also ask the previous owners to remove large items such as a pool or a piano. 

Start Your Property Search 

These are just some of the things that you need to be aware of when you start your property search. If you keep all of the above factors in mind, you should have a desirable home that you can afford in no time. 

Are you ready to buy your dream home in San Diego? Start looking for a home to buy today. 

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