Many people harbor secret fears about buying a house, and some of those fears are justified. Not everybody is cut out to own a home, and if you’re one of those people, it’s better to find this out now than when you’re under contract.
You might decide that renting is better for you than buying, because buying a home has its drawbacks. On the other side of the coin, there are many more benefits to buying.
Keep these reasons in mind if you start to get cold feet. Before buying a home, get your finances in order.
Line up your financing, set aside a down payment and study the loan programs available. By doing your homework, you will know exactly how much you can pay and what it will cost you.
Order your credit report and give yourself time to clean up a credit report that contains mistakes. Dispute any errors and try to reduce your monthly debt obligations now by paying down those loan balances.
Check out places to get a mortgage and compare rates and fees. Start with your own financial institution, then interview a few mortgage brokers and choose a loan product you completely understand.
Determine how much you want to put into a down payment and remember that the more you put down, the lower your monthly mortgage payment. A down payment is cash up front, so make sure you have the funds to put that money down.
FHA loans carry competitive interest rates, come with minimum down payment requirements and allow sellers to pay some or all of your closing costs. Get a pre-approval letter from a lender.
Showing the seller you are already pre-approved for a loan gives you an edge during offer negotiation. With so much information available online, you might wonder why you need an agent at all.
But all local markets vary from one another, and a good agent can guide you by giving you information based on experience and market knowledge. An agent with experience can help you to avoid making mistakes such as choosing the wrong house or offering too much.
Start by asking your friends and family member for referrals. Make sure you are comfortable with your agent before committing to work with that person.
The best way to avoid making a mistake is to learn from the mistakes others have made. Buying a home in a desirable location is your best defense because it is more likely to appreciate in value over the years.
Start your search online, and don’t rely on print because most homes are not advertised in the newspaper. Ask your agent to look at houses before showing them to you, and tour only those that fit your parameters.
Protect your earnest money deposit by writing contingencies into your contract. Never agree to final papers without going through inspections and appraisals.
Although buying a home is not like buying a car, you can still negotiate to get a good price so play hardball. Price isn’t the only consideration and sellers often accept lower-priced offers for other considerations.
It is common for sellers and buyers to negotiate back and forth through counter offers so make sure you have an edge in negotiations. Most states have laws about the types of disclosures you are entitled to receive.
Find an inspection list online and make sure your home inspector doesn’t miss anything crucial. Always do a final inspection a few days before closing to make sure the property is in the same condition as when you agreed to buy it.
Transactions generally close within 30 to 60 days after your offer has been accepted. Remember to reserve movers or a moving truck early because many people move at the end of the month.
Shop around for insurance rates carefully, and consider bundling with your automobile insurance to save some money. You might think you don’t need a title policy, but it’s the cheapest form of insurance you can buy, and you pay the premium only once.
Jack R. Landry has worked in real estate since 1988 as an expert on home buying and construction. He has written hundreds of articles on real estate and recommends (http://www.alwaysaffordablehomes.com) for new construction.
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