The top 10 things you
need to know when buying a home.
1. Don't buy if you can't stay put.
If you can't commit to
remaining in one place for at least a few years, then owning is probably not
for you, at least not yet. With the transaction costs of buying and selling a
home, you may end up losing money if you sell any sooner - even in a rising market.
When prices are falling, it's an even worse proposition.
2. Start by shoring up your credit.
Since you most likely will need to get a
mortgage to buy a house, you must make sure your credit history is as clean as
possible. A few months before you start house hunting, get copies of your
credit report. Make sure the facts are correct, and fix any problems you
3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing
that runs about two-and-one-half times your annual salary. But you'll do better
to use one of many calculators available online to get a better handle on how
your income, debts, and expenses affect what you can afford.
4. If you can't put down the usual 20 percent,
you may still qualify for a loan.
There are a variety of public and private
lenders who, if you qualify, offer low-interest mortgages that require a small
5. Buy in a district with good schools.
In most areas, this advice applies even if you
don't have school-age children. Reason: When it comes time to sell, you'll
learn that strong school districts are a top priority for many home buyers,
thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers
unprecedented access to home listings, most new buyers (and many more
experienced ones) are better off using a professional agent. Look for an
exclusive buyer agent, if possible, who will have your interests at heart and
can help you with strategies during the bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the
option of paying additional points -- a portion of the interest that you pay at
closing -- in exchange for a lower interest rate. If you stay in the house for
a long time -- say three to five years or more -- it's usually a better deal to
take the points. The lower interest rate will save you more in the long run.
8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the
grief of looking at houses you can't afford and put you in a better position to
make a serious offer when you do find the right house. Not to be confused with
pre-qualification, which is based on a cursory review of your finances,
pre-approval from a lender is based on your actual income, debt and credit
9. Do your homework before bidding.
Your opening bid should be based on the sales
trend of similar homes in the neighborhood. So before making it, consider sales
of similar homes in the last three months. If homes have recently sold at 5
percent less than the asking price, you should make a bid that's about eight to
10 percent lower than what the seller is asking.
10. Hire a home inspector.Sure, your lender will require a home appraisal
anyway. But that's just the bank's way of determining whether the house is
worth the price you've agreed to pay. Separately, you should hire your own home
inspector, preferably an engineer with experience in doing home surveys in the
area where you are buying. His or her job will be to point out potential
problems that could require costly repairs down the road.
Author:Michelle Cantrell Phone: 417-860-6505 Dated: December 17th 2013 Views: 1,130 About Michelle: Michelle is a native of Southwest Missouri and has twenty-five years of experience in selling real e...
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