Are you in Good Hands?
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Are you in Good Hands?


It’s the American dream, but to make homeownership financially viable takes planning and forethought. Whether your ideal living space is a trendy brownstone, high-rise condo or classic colonial, here are six tips to help your home purchase pay off for years to come.

1. Save before you shop

Resist the urge to scour real estate listings until you have your financial ducks in a row. Now is the time to create a budget and start saving! To get the best rate on a conventional loan, you’ll typically need a down payment of 20 percent.

2. Repair your credit snafus

It can happen to the best of us. A late payment here and there can bring down your credit score and impact the terms of your mortgage come home-buying time. While you’re saving up, check your credit history with one of the three national services (you can get a free credit report from each of them once every 12 months) and then take steps to repair any credit dings (such as paying off debts or arranging a payment schedule) before you apply for a home loan.

Did You Know?

In 2016 there were $2.1 trillion in originated mortgages.

3. Get smart about mortgages

This important part of the process can feel overwhelming, but like anything else it’s best done in small steps. First, understand what type of mortgage you’ll need, such as a fixed or adjustable rate loan, or a balloon mortgage. See if you qualify for any programs, such as a Veteran’s program. Ask friends for reputable mortgage lenders that they’ve used, and find the ones in your area that are offering the best rates. Read all of the fine print involved, or ask your lawyer to. Get prequalified so you can move quickly once the right property comes your way.

4. Research the market

The value of your home goes far beyond the purchase price. Look up property tax rates, crime statistics, school system ratings, and neighborhood amenities that can add (or detract) from the value of the home. Check the FEMA Flood Map to see if the house is in a floodplain. Other amenities, such as access to public transportation, easy commutes, and nearby fire and police stations, all add to the inherent value of the home now and into the future. And talk to the area’s business association for news of civic and economic development that may indicate an upswing in real estate values.

5. Inspect for value

Once you find that dream home, don’t let emotions rule the day. Get a professional home inspection. When possible, be present during the inspection. Review the report carefully and ask the inspector if or when costly improvements—such as replacing the roof, repairing the home’s foundation or replacing outdated aluminum wiring—may be required.

6. Protect your investment

Once you’ve purchased your dream house, safeguard your home, its contents and land with the appropriate insurance. According to the Insurance Information Institute, homeowners should purchase a policy that covers the cost of rebuilding rather than the purchase price. Other considerations are flood or earthquake insurance and liability insurance to cover accidents that may happen on your property. Jewelry, collectibles, furs and other pricey items should be covered with a personal property floater, also known as a rider policy. Your Allstate agent can help you determine the right coverage.