- Don’t buy if you can’t live there for at least 3 to 5 years.
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 for you. So if you can commit to staying for a while, you will be able to reap the benefits.
- Start by bringing up your credit score.
Since you most likely will need to get a mortgage when buying a house, you must make sure your credit history is as clean as possible. You will want to have a great credit score a few months before you start house hunting. Obtain copies of your credit report so you will know whats on it. Make sure the facts are correct and fix any problems you discover. Lenders will help you determine the average credit score to buy a house that will fit your needs.
- Start looking 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 affordable homes are available on the market to buy.
- 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 down payment as small as 3 percent of the purchase price.
- Buy in a district with great 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 and re-sell values in your home.
- Get professional help when looking to buy or sell a home.
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. We walk you through all the process of buying and selling a house.
- 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.
- Before looking for a house, you should get pre-approved.
Getting pre-approved will 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. Pre-approval from a lender is based on your actual income, debt and credit history. Get pre-approved for a home loan first and let’s start looking for your next home.
- Do your homework before making an offer.
Your offer should be based on the sales trend of similar homes in your neighborhood. So before making it, consider sales of similar homes in the last three to six months. If homes have recently sold at 5 percent less than the asking price, you should make an offer that’s about eight to 10 percent lower than what the seller is asking. This tactic will give the necessary room to negotiate a favorable final offer price. We will assist you and provide you advice on making an offer on a house that you want to purchase.
- Should I hire a home inspector?
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 a Home Inspection Company with experience to determine if the house has any flaws. His or her job will be to point out potential problems that could require costly repairs down the road.
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