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Buying a House in Philadelphia [2024] | ๐Ÿก Should You, & How to with Tips & Steps for Philadelphia

Last Updated on: 11th January 2024, 08:25 pm

What’s known as the largest city within Pennsylvania and is the home of the Independence Hall and the Liberty Bell, Philadelphia is a historic and family-friendly place to call home. The cost of living in Philadelphia is only 1.2% higher than the national average. This beautiful city is known for its variety of parks, trails, and places to go on an outdoor adventure.

As we mentioned, there are fun places to explore, and here are the top areas in Philadelphia: The Franklin Institute, Philadelphia Zoo, Dilworth Park, the Philadelphia Museum of Art, Liberty Bell, and the Independence National Historical Park.

The climate in Philadelphia drastically changes based on the time of year. In the summer and spring months, the weather is hot, humid, and rainy. Then in the winter and fall months, the weather is incredibly cold, cloudy, and snowy. Regardless of the time of year, if you come prepared with a good winter jacket, shorts, rain boots, and an umbrella, you will be all set.

We understand that relocating to a new area is daunting, but it doesn’t have to be. Here is an ultimate guide with everything you need to know about living in Philadelphia before moving.

As you go through the process of finding a house, it can feel overwhelming–even more so if you’ve never house hunted before. To help make this process seamless, we have created a complete guide with everything you need to know about purchasing a home in Philadelphia.

The Steps To Buying A House In Philadelphia

By working with the #1 real estate agent and best loan officer, purchasing a house in Philadelphia can be seamless and quick. Here are highly recommended steps to help ease your stress during this transition.

How Much Does It Cost To Buy A House In Philadelphia?

You need to first figure out how much you can afford before looking at houses because purchasing a home is a big commitment. The monthly budget for buying a piece of property is more than the mortgage, homeowners insurance, property taxes, and property keep-up. It’s essential to take into account everything else like food, health care, gas, utilities, and supplies for your pets and then mesh the two so you can get an accurate picture of what you can afford or not.

A first step that you can take to help you get a starting point is to utilize an affordability calculator. Let’s break down an example based on if you’re a single adult that is making $85,000 and currently have a monthly debt totaling $600 for your car payment and credit card debt.

  • Downpayment: $20,000
  • Debt-to-income ratio: 30%
  • Interest rate: 5.031%
  • Loan term: 30 years
  • Property taxes: 1.2%
  • Home insurance: $1,200

Based on the information above, you can afford a home priced at $218,324, and if you broke that down on a monthly basis, that would be around $1,512 per month. This number can change based on the down payment, by reducing your debt, and if you get a raise at work.

It’s essential to note that you don’t want your debt-to-income ratio to be higher than the maximum of 36%. Ideally, it would be much lower than that, but you have to choose what you feel comfortable paying. You also don’t want more than 28% of that debt-to-income ratio to go towards the principal, interest, or taxes & insurance (PITI).

The average homeowner throughout the United States has around $10,000 in unexpected home expenses in a given year, so keep that in mind when creating a budget. To give you a better sense of what some of the unexpected costs could be, here are some of the most common expenses:

  • Closing costs: The average closing costs after taxes will be around $9,440
  • Homeowner’s insurance: The median homeowner’s insurance cost for a $250,000 house is $1,383 per year
  • Utilities: An average of $230 per month
  • Property Taxes: The property tax rate for Philadelphia is 1.3998%. There are some exceptions for homeowners in the city, which will reduce the amount you owe on your property taxes, so check to see if your new home qualifies for one. For an interactive map, click here.

In Philadelphia, the median sale price for a home is $289,900, and there is a wide variety of neighborhoods in Philadelphia to choose from, so here are some of the safe and family-friendly Philly neighborhood options:

What Is Needed To Qualify For A Mortgage In Philadelphia?

After you create your budget, the next step before going house hunting is to get pre-approved by the bank or credit union that will be your lender. Now you might be wondering why this is essential because you haven’t even found a house yet that you wanted, but when you show up with a preapproval for a specific price range, it will make your offer more competitive and attractive to the seller. The most common loan types include conventional (Frannie Mae or Freddie Mac), fixed-rate, and adjustable-rate mortgages. The fixed rate is the most predictable because your monthly payments will stay the same throughout the loan period. Whereas with an adjustable rate, it will vary based on the economic and interest rates, so it can frequently change.

If you are a first-time home buyer, it can feel daunting to come up with the money for a down payment and the closing costs, so consider applying for one of these home buying assistant programs. While there is a federal option, we also wanted to share one that is solely found in Philadelphia.

Philly First Time Home Program

Philly’s first-time home buyer program provides the individual with a grant of up to $10,000 or 6% of the purchase price to help them afford to buy their first home. The thing to note is that if you move or refinance within 15 years, the grant has to be repaid back in full.

To qualify, you must be a first-time home buyer or someone who has not personally owned a home for the past 3 years or longer. You also have to go through a home ownership certification program before you sign the agreement for the home. And the last guideline is to be within the income requirements. Here is a chart based on their income guidelines:

USDA Home Loans

The USDA loan is required to get paid back within a designated amount of time. If you get accepted into the program, the low-income individual can utilize the loans to purchase a home within a designated rural area, build/repair a home, and even prepare your new home site. You will need to complete a home buyers counseling program before getting approved for the loan.

Find A Philadelphia Real Estate Agent

Do you not have a real estate agent? Don’t stress because it’s not as overwhelming as it might seem to find a trustworthy and professional real estate agent in Philadelphia. When finding one, we recommend you choose to work with a buyer’s agent because they can walk you through the entire process and answer any questions you might have when purchasing your new home.

Some additional benefits of choosing a buyer’s agent are that they help make this home buying process seamless, so you can avoid the common mistakes that first-time home buyers make.

To help you find your go-to agent, here are the best Philadelphia real estate agents!

Go Philadelphia House Hunting

It’s time to go and find your dream home! You will want to create a list (if you haven’t already) of the features that your new house must have, that you would like to have, and what is optional. When you do this step beforehand, it can help you stay focused and not feel overwhelmed trying to decide at the moment– you can simply go down your list.

For more information about picking out the best neighborhood that works for you and your lifestyle, click here.

Here are some of the top-rated neighborhoods in Philadelphia, along with the median house price:

  • Chestnut Hill | LGBTQ Friendly: $892,500
  • Whitman | Affordable Area: $266,500
  • Bustleton | Family-Friendly: $362,500
  • East Falls | Popular For Young Professionals: $362,500

These are just a few examples of the safe, family-friendly, diverse, and accepting neighborhoods you can find in Philadelphia!

Submit An Offer

Once you find your dream home, it’s time to submit an offer! Your agent will help put together a strategy to help make your application to the seller stand out.

Commonly, a seller will make a counteroffer for a higher price or a fewer number of contingencies, so don’t get worried if that happens. After both parties are on the same page, it will be time to go under contract.

During this, the buyer has to complete an inspection and get an appraisal done before the final day of escrow.

Close On Your New Philadelphia Home

You are so close to getting the keys to your beautiful new home! After everything is approved one final time by the lender (based on the information found in the appraisal and inspection), it will be time to sign on the dotted line.

Keep in mind, it’s common for this process to take 60-90 days. Once the paperwork comes back from the lender, it will be time to meet with your real estate agent and sign the final documents.

Now that you have a gorgeous new home to move into, you have to consider how you’re going to transport your belongings. Suburban Moving is the best Philadelphia moving company out there! With our professional, trustworthy, and hardworking nature, you will only receive the highest-quality services. Call us today at (610) 314-6868 to receive a free quote on our affordable prices.


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