Buying a Home in Iowa City: Getting the Best Deal in Any Market
How can you make sure you’re not paying too much when you buy a home in Iowa City? There are two ways you can end up paying more than you wanted for a home. The first is when you pay more than market price for a house. The second is when the loan you get isn’t the best for your situation. I’ve never had a buyer tell me he wants to pay more for a house. Sure, sometimes it happens in new construction when buyers want upgrades not included in the purchase price, but that’s not what we’re talking about here. There are some basic steps you can take to make sure you cover your bases when you buy a home. Below is my input on how best to protect yourself and make sure you get the best deal possible when you buy a home in the Iowa City area.
Avoid Paying Too Much For a Home
What price do you offer a seller? Is the seller’s asking price too high? Is the house priced right? Without research on the Iowa City real estate market and comparable homes, you could end up losing money. Before you make an offer on a home in Iowa City, be sure you have as much information as possible. You’ll need to know the price that similar homes sold at in the last few months. The real estate market is constantly changing so it’s best to keep it as tight as possible. Then there’s the condition of the home to consider and the location. Here in Iowa City for instance if a home is on the bus line and within easy access of the UI Hospitals, that would have a positive impact on the price. There may also be negative factors about the home compared to the comparable neighborhood sales to consider. Maybe it’s lacking on features or amenities that comparable sales have. Before you make an offer on a home it’s important to look at the bigger picture to gauge all the different aspects that may have an impact on the price of the home. This is where a good buyer’s agent is worth their weight in gold. A good buyer’s agent will help you sieve through the details and assist you in figuring out what exactly you should offer for the house or condo you’ve picked out.
Finding the Right Loan
The best way to go about finding the right loan is to talk to a couple of different lenders to get an idea of your options.Different lenders have different programs to offer, but of course there are a few things they all have in common.
- Interest Rate
- Downpayment Requirement
- Closing Costs
You will find when you are shopping for a loan that one lender may have a lower interest rate, but higher closing costs, or vice-versa. Either way, it may not be a deal breaker. When you apply for a loan, the lender will give you a Good Faith Estimate. This is a break down of the costs involved in getting a loan and the amount you can expect to bring to the closing table. If you get a couple of Good Faith Estimates from 2 -3 different lenders, then you can compare them to one another and figure out what works best for your bottom line.
If you’re looking for a loan with a low or no down payment option, then an FHA or a Rural Development loan may be the way to go. The FHA loan is a government insured loan offered by the Federal Housing Administration. FHA loans are very popular with buyers on a budget looking for a good interest rate and a low down payment option. At present the down payment requirement is 3.5% and the loan can be used to buy a home anywhere in the Iowa City area. There are many FHA Approved Lenders in the Iowa City area.
The Rural Development loan is offered by the USDA and is designed to help economic growth in rural areas. Rural Development / USDA loans offer a 100% financing option to Buyers – the only 30 yr loan that does right now. There is a 2% funding fee, but this is offset by the fact that there is no mortgage insurance required. As the name suggests, this is a loan that is only available to buyers in rural areas. Of the areas I cover, Tiffin is the closest rural area where buyers may be able to qualify for an RD Loan. There are a couple of lenders in town that specialize in RD loans, although they are not as widespread as those offering FHA Loans. Please email me if you’d like the names to local lenders who specialize in these types of loans.
Are you looking for the right Realtor to help you navigate the complexities of the real estate market, all the while looking out for you and your money? Sound advice and guidance is just a phone call, text or email away. Call Denise now at 319-400-0268.