Are you looking to buy a new home out of state? This can be a stressful process, especially if you don’t know the area well. If you're fortunate enough to be able to buy the new home without a mortgage, go for it. But if you are looking to get a home loan for your new purchase, you might be surprised to find learn that the loan will not be as easy to obtain out of state. Depending on the reason for your purchase, you might have a higher down payment or interest rate.
If you have decided you want to purchase a home in another state, here are some helpful tips covering what you need to know.
Obtaining a home loan
Obtaining a home loan out of state will not be as easy as it would if you were purchasing a home in the same state as your current home. Don’t get discouraged; just know that things might take a little longer. The lender's decision to allow the out-of-state purchase may depend upon the reason for your purchase. Make sure you have a well-thought-out decision, because if you say it would be fun to own a home in tropical Florida (while you’re from Arizona), you will probably get denied. Don’t be surprised if the bank or lending institution chooses to raise the down payment requirement or decides to charge a higher interest rate.
When buying a home in another state, it’s essential to do your research. Go online and read about different cities and neighborhoods. Search online listings of homes to become familiar with the different agents that specialize in the local neighborhoods; it’s not a bad idea to email a few of them. Most agents will send you listings each week so you know when new houses hit the market. When searching online, make sure you are specific with your key words (example: put buyer’s agent downtown Los Angeles rather than real estate agent in LA).
If you have friends or family in that state, ask them to identify some good areas/neighborhoods, and areas that you likely want to avoid. Since you’re unfamiliar with the area, you’ll be at a disadvantage. If you need help the best thing to do would be to hire a buyer’s agent. They are often neighborhood specialists and will make sure they find what you are looking for. Do not ask for a listing agent because they most likely represent the seller, and will be working in the seller’s best interests. Click here for more info on buyer’s agents.
Visit the state
Visiting the state is a must. Maybe you’ve been before for vacation or to visit family, but this is the best way to become familiar with the area. While visiting, go to some open houses to get an idea on pricing and neighborhoods. Open houses are an excellent opportunity to meet and interact with buyer’s agents and find out more about them. Open houses are sometimes held by the selling agent, but often are organized by the buying agent. You might end up finding an awesome buyer’s agent who will be able to help you continue your search. If you connect with the agent, you can get their info and ask them if they have any more properties that meet your criteria.
Closing process- Initial procedures
Once you find the house of your dreams, you will have to do a home inspection. If you don’t have anyone who can help you with this, then you will have to fly out and see the property being inspected. After the inspection, an appraiser will inspect the home to make sure it worth as much or more than the purchase price. From here, the procedures will be the same as if you were buying a house in your home state: the buyer must organize the paperwork, secure the insurance coverage, the title and the mortgage or loan. During closing, funds can be wired to the closing attorney in the destination state. For more tips, check out this website.
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