10 Tips to Buy a Home!
Submitted by Bruce Hecht
So you think you want to buy a home?
1) Don’t buy if you are not going to live in it for a few years.
If you can’t commit to staying in one place for at least a few years, then buying a home is probably not a good direction for you, at least not now. With the transaction costs of buying and selling a home, you may end up losing money if you do not hold on to it for at least 2.5-4 years.
2) Start by making your credit as stellar as it can be.
Since you will need a mortgage to buy a home, unless you plan to use CASH, you should have your credit history as clean as possible. T his process should begin/take place many months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
3) Aim high, but not so high that you are house poor.
A good rule to use is: buy housing that runs about two-and-one-half times your annual salary. 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) Don’t worry if you can’t put down the usual 20 percent.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a down payment as small as 3 percent of the purchase price. The change is that the rates may vary.
5) Buy where you can afford with the best schools.
This advice applies even if you don’t have school-age children. When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buys, thus helping to boost property values and your home appreciation.
6) Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, it’s still a very valuable tool to have an experiences/savvy agent on your side. Look for an exclusive buyers agent, they will have your interests at heart and can help you with strategies during the purchase 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. The lower interest rate will save you more in the long run.
8) Before house hunting, get “credit approved.”
Getting yourself credit approved will save yourself the grief of looking at houses you cannot afford and put you in a better position to make a serious offer when you do find the right house.
9) Do your homework before putting your offer together.
Your opening offer should be based on the sales trend of similar homes in the neighborhood. Consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less that the asking price, you should make a bid that’s about eight to ten percent lower than what the seller is asking.
10) Make sure to have your new home professional inspected.
Your lender will require a home appraisal. But that’s just the banks way of determining whether the house is worth the price you’ve agreed to pay. You should hire your own home inspector. His or her job will be to point out potential problems that could require costly repairs down the road.
