Buying house the right way
Home ownership is major part of the American Dream. However, before you start looking, there are a number of things to consider. You will need to determine what your needs are and whether owning your own home will meet those needs. You will also need to determine if you can make mortgage payments or if you qualify for a home purchase loan. The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment. Like many other investments, however, real estate prices can fluctuate considerably. If you aren’t ready to settle down in one spot for a few years, you should probably wait to purchase your first home. When you are ready to make that plunge, you will need to consider how much you can afford, choose the right neighborhood, and find a qualified broker to help make your dream come true.
Consider What You Can Afford:
Many homebuyers are surprised to find that a down payment of proper housing is not the only cash requirement that will hit. There is also the home inspection, which can cost $200 or more. Closing costs may also include loan origination fees, up-front prepaid interest, application and appraisal fees, survey, title search and title insurance, recording fees and attorney’s fees. Not to mention, in many locales, transfer taxes. Plus, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price. Finally, you will more than likely need a down payment of at least 10 percent of the cost of your home. It is typically suggested that first time homeowners choose to arrange financing before shopping for a home and most mortgage lenders will “pre-qualify” you for a certain amount. Pre-qualification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price.
Choosing the Right Neighborhood:
Before you make any buying decisions, be sure have a full understanding of the neighborhood and the area around your potential home. If you’re not moving cross-town, you may not know that only three blocks away, this quite neighborhood backs up to a unmaintained commercial lot or a neglected piece of property. If the home is near an airport, fire station, police station, hospital or railroad track, expect to hear trains, planes or ambulances throughout the day and night. Be sure to check that you are not too close to an agricultural area that may generate odors or kick up dust or other airborne problems. Also, do not forget to speak with neighbors. You can learn a lot about the neighborhood by spending some time with the people who live there. Strike up a conversation. Let them know you are considering a moving to the area. You will be surprise at what people are willing to share.
Tip: Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding the Right Broker:
For first time homebuyer, it is always best to work with a licensed real estate broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask many questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. Be sure to check that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country.
Tip: Do not hesitate to ask friends and family who have been through the home buying experience for suggestions and referrals.