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As everyone takes advantage of the summer sun, one little-known observation is that this is also a season of change. That is, for some, it’s a time to change scenery.

Many people make big moves to new spaces during this time of year. Indeed, the housing market sees higher activity for buying and selling.

If moving into a new place is part of your summer plans, keeping a few things in mind before you close on a deal is important. Here are our tips to ensure you can confidently make your next move.

Why the Housing Market Spikes in Activity During the Summer

Everyone has their reasons for moving during the summertime. Generally speaking, many factors make this time of year ideal for closing on a home. These reasons include:

School is out. For families, the summertime is the best time to move because classes are dismissed for the summer. This gives parents and guardians sufficient time to prepare and enact a move.

Competitive market. Regarding longstanding trends, more properties tend to go on sale in the summer months. Also, homes that have been on the market for longer tend to lower their prices during this time to remain competitive.

Increase in inventory. Summer also sees an increase in housing inventory. More homes tend to be listed during these months. Also, this trend coincides with people using more of their vacation time, which can be used for closing on a home and moving. People’s schedules are more fluid, which makes moving more attractive.

For many reasons, buying a home is one of the most important decisions anyone can make. To get the most from your investment, there are many things to consider, both while shopping around and before you hit the negotiating table.

Things First-Time Buyers Should Remember

Everything can feel intimidating if this is your first time buying a home. You may know that buying a house involves shopping around, thinking about financing, and calculating monthly payments.

There is a good chance that you will be taking out a mortgage to pay for your house. A “mortgage” is a loan used to purchase a home. The backer of the loan (typically your financial institution) will foot the upfront costs of your purchase, and then you will pay the lender back in regular installments. The average term for a loan is between 15 and 30 years.

Prospective borrowers must prove to their lender that they are serious about buying a house in order to qualify for a mortgage. This includes saving enough money to make a “down payment,” which is like paying a portion of a house’s price. A down payment is typically deducted from the total cost of a mortgage, and it also helps determine monthly payments. Generally speaking, the more you put upfront towards your down payment, the lower your monthly installments will be.

It’s essential to understand how much paying down a mortgage will cost you each month. Additionally, paying off a mortgage is fundamentally different from paying rent because a homeowner is responsible for the upkeep of their purchase. Other costs associated with owning property include:

• Paying property taxes and local fees
• Home repairs, remodeling, and renovation costs
• Costs of homeowner association fees, if applicable
• Maintenance costs
  

A very useful tool for home buying is getting pre-approved for a home loan. A pre-approval is particularly attractive because it shows that you have taken the necessary steps to prove to lenders and sellers that you are serious about buying a house. It can also provide some leverage when negotiating a final price since it sets a baseline for your budget.

Other Hidden Costs To Buying a Home

Similar to buying a car, buying a house doesn’t just stop at coming to a deal with the seller. There are additional costs to buying a house, which we will cover briefly below.

Some additional costs to buying a home include:

• Closing Costs: These are fees associated with “closing the deal” in a home-buying transaction. They can include many costs, such as attorney fees, real estate agent commissions, title transfers, appraisals, and taxes. There could be many stipulations in a contract of sale that will leave you on the hook, which may exceed the value of your loan.
• Private Mortgage Insurance (PMI): If you put a down payment that is less than 20 percent of the home’s purchase price, you may be subject to PMI. This is an extra expense since the lender is taking an extra risk by issuing a home loan. PMI isn’t a fee you’ll pay forever, however. If you meet certain requirements, you can request to cancel it. Talk to your mortgage officer for more details.
• Homeowner’s Insurance: You will likely take out an insurance policy to protect your property. Insurance can reimburse you if your property gets damaged due to bad weather or accidents. However, not all insurance policies are the same, and you might be required to take out policies that cover very specific cases (like flooding and storms) in addition to the original plan.

This is by no means an exhaustive list. As you shop for a home and potential lenders, it’s important to keep track of the additional costs you will be responsible for paying.

Buying a home can be daunting, but it is also one of the most important investments you can make. You can close the deal confidently by brushing up on your home-buying knowledge.

First Florida is your partner in the home-buying process. We offer many types of home loans that can assist you on your journey, as well as calculators you may use to predict the cost of your home. Explore our website to learn more.