How to buy a house. Part 1

Real Estate Agent with Citiwide Real Estate Services

1. You need be able to stay in your home for several years.

You want to be able to build equity before having to sell.  The cost of selling a home can be quite expensive. With no equity you could end up owing money at closing if you need to sell after only 2 or 3 years in a new home.

2. Check your credit.

You can find many websites that can provided your credit reports and your scores.  This way you can fix any errors ahead of time. You want to start this process several months before you buy a house.

3. Aim for a home you can really afford.

You can find money and payment calculators that will help you determine how much you can afford based on your income and debt. Your lender will be key in helping you make this determination.

4. If you can't put down the usual 20 percent, you may still qualify for a loan.

You can still qualify for a loan. There a lots of programs that offer smaller down payment and even some grant programs can help with down payment.

5. Buy in a district with good schools.

This is a part of your selling strategy.  If you should ever decide to sell your home, good schools are always the first thing considered by most buyers.

6. Get professional help.

The internet is a great source for real estate information but most of it is very generalized.  You should hire a REALTOR that is familiar with your area.  Buyers' agents are usually paid by the seller.  With a few exceptions most buyers' agents are able to represent you for no charge.

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 time and provide you with a powerful negotiation tool.  Sellers will consider your offer more favorable if you have been pre-approved.

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. Get the home inspected by a professional inspector.

Don't confuse your appraisal and the inspection.  The appraisal is used by the bank to make sure the home is worth the amount of money they are lending you.  The appraisal protects the banks interest in the house.   An inspector will protect your interest by pointing out physical and structural defects and help you avoid costly repairs.


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