The Southwest Metro of the Twin Cities is one of the best places to live, not just in Minnesota but in the entire country. With great cities like Minnetonka, Eden Prairie, Chaska and Chanhassen, the Southwest Metro features many beautiful parks and lakes, allowing residents to fully enjoy the outdoors while still being within close driving distance of Minneapolis and Saint Paul.
If you’re a first time home buyer in the Southwest Twin Cities, there are a few things you should know before you start looking. Continue reading to learn what you need to do before making an offer on a home in the Southwest Metro.
Top 3 Tips for Buying a Home in the SW Twin Cities
- Research Loans – Unless you’re particularly flush with cash, you’re going to need to take out a mortgage loan in order to buy a house in the Southwest Metro. If you’ve never purchased a house before, you may not realize that there are many different kinds of mortgages and you need to meet different requirements to be approved for each of them. A conventional loan, obtained from a bank or another private lender, may seem appealing since you often only need to make a down payment of 3% on the house you’re buying. Just keep in mind that you’ll need to have a high credit score to be approved, and you’ll also need to place a much larger down payment to avoid paying private mortgage insurance. If you’re interested in purchasing a home in the more rural cities of the Southwest Metro, such as Carver or Waconia, you might want to look into applying for a USDA loan. This government-sponsored mortgage option may not require you to make any down payment, so long as you’re moving to a rural area and meet income requirements.
- Get Preapproved for Your Mortgage – “Mortgage preapproval” is one of those terms you’ve probably heard tossed around but, if you’re a first time home buyer, you might have no idea what it means. Getting approved for a mortgage loan is dependent on what lenders find when they examine your credit score, bank statements and other financial records. If you’ve already fallen in love with a house in the Southwest Twin Cities, the last thing you want is to discover you don’t qualify for the loan you need. That’s why you should get preapproved for a mortgage before you put an offer on a home. Applying for mortgage preapproval will allow you to learn exactly how much a particular lender is willing to loan you before you try to purchase a home in the Southwest Metro.
- Determine Your Budget and Stick to It – If you’re a first time home buyer, you might not be prepared for all of the expenses associated with buying a home. It would be tragic to get your heart set on one of the Southwest Metro’s beautiful homes, only to learn that you simply can’t afford it. This is why it’s important to calculate your budget before you even begin house hunting. The biggest expense will be your down payment, which will likely range from 5% to 20% of the house’s total cost. But closing costs can add up to a big number as well. These costs include fees for your real estate agent, attorney and home inspection. Even after these initial costs, don’t forget that you’ll be paying off your mortgage each month and, depending on your loan and the size of your down payment, you may also be paying monthly PMI. And that’s not even considering things like the cost of moving or of purchasing furniture for your new house! Determining your budget can help narrow down your home search in the Southwest Twin Cities and allow you to find the right house in your price range.
Need Help Buying a Home in the Southwest Metro?
One final tip for first time home buyers: hire a good real estate agent! Realtors know everything there is to know about the local housing market and can help you buy your dream home. Contact the Nydahl Group today for all the help you need with buying a home in the Southwest Twin Cities!
