The Top 5 New Home Purchasing Tips

Now is the perfect time to dip your toes in the real estate market and purchase a home. Not only are the interest rates low, but the market is heavy with an astounding amount of homes ready for your choosing. However, before you begin your search, the following tips are sure to help you get ready:

1. Determine How Much You Can Afford:

Before beginning your home search, review your finances and know exactly how much you can afford to spend. Take a look at your monthly income and expenses to determine how much of a down payment you can put down. Don’t forget to factor in real estate taxes and insurance.

2. Work with a Professional:

Select a reputable and successful real estate agent. Not only will they be able to send you homes directly from the Multiple Listing Service, but they can also save you time in your search by weeding out homes that are out of your parameters.

3. Get Pre-approved:

Before you begin looking at homes, speak to a lender and get pre-qualified for your loan. This will help you to find out exactly how much money a bank will lend you and will also come in handy when it’s time to negotiate a price. Educate yourself on the type of loan programs and interest rates that are out there to see which would best suit your family’s needs.

4. Time to Shop for a Home:

Now that you’ve gone over your finances, selected an agent to represent you and have gotten pre-approved, you can start searching for homes. Several factors come in to play like choosing a single family, townhouse or condo; the neighborhood you would like to live in; do you want new construction or a home and area already established; what are the school districts associated with the home? Make sure the real estate agent knows your criteria so you don’t waste any time.

5. Negotiate the Price and Close the Deal:

Once you’ve found the perfect home, it’s time to negotiate the price of purchase. Your real estate agent can give you all the tools necessary to make a fair offer based on homes that are on the market and what they have currently sold for. After you’ve negotiated the price and terms of the contract, hire a reputable home inspector to take a look at the home and determine if it is safe and sound for purchase. Have your real estate attorney thoroughly examine all contracts for your protection. Once your mortgage commitment has been approved, you will be able to close on your home and begin the dream of home ownership.

What Questions to Ask When Moving From Renting to Buying Your First Home

The Big Question Renters Ask

When someone has been living in a rental home or apartment for several years, it is easy for him to question the age-old wisdom that says buying a home is wiser than renting one.

Here is the way the question is normally asked: If I buy a house and take out a 30-year mortgage, paying interest for several years, all repairs and utilities, while forking out another 25% in local and state taxes, caring for my own lawn and landscape, then tell me again, why should I buy a house instead of renting one?

Add to this question another: And, what if I have to relocate in five years, unexpectedly, and I get stuck with a mortgage in one town and have to commit to a new rental payment in the other?

The Questions a Home Buyer Asks

People who have already wrestled with these questions, yet have concluded that buying a home is the smarter way to go, would pose another set of questions to the intractable renter:

• Why would you want every penny of your housing money going into someone else’s pocket? Wouldn’t you rather be able to recover most of it, and, perhaps, increase your net worth by buying a home instead?
• What if your apartment building changes hands and the next owner lets the property fall into disrepair?
• What if you sign a one-year lease on an apartment and then find out your company is moving you to another state? Will you be able to sublet your apartment to someone else when most contracts disallow it?
• What if you need to expand your dining room or improve your kitchen? The home is not yours, so how are you going to pull that off?

The Common Misconceptions of Buying a Home

Transitioning from renting to owning follows the logical sequence of the questions posed above. Sometimes, owning does not make sense until a renter has become an owner and experiences the freedom and assurance of having a place he can call his own.

The belief that all the taxes, upkeep and economic woes are reasons enough to keep losing 100% of their housing money to the landlord is, at best, skeptical. Considering the economic downturns, even the worst case scenario for a home owner is the possibility that his house will be devalued over time. However, the loss will be nowhere near the 100% that a renter experiences every month he makes his payment.

The history of home ownership bears out the wisdom of investing in a house rather than paying to use someone else’s. Economic downturns are temporary; the freedom of owning lasts a lifetime.