Home Buying Tips
Find Out How Much Mortgage Can You Afford
You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that's your monthly income before taxes and other paycheck deductions are taken out.) You also need to consider current loan interest rates. The lower the interest rate, the nicer the home you'll be able to afford. If you are into crunching numbers, try the:
How Much House Can You Afford Calculator
Create Your "Wish List"
Make your wish list. Focus on the features you want in a home: 2 bedrooms or 3? 1 bath or 2? Garage or no garage? Knowing what you're looking for will help you focus your search. It will help your real estate broker, too.
Find a Real Estate Broker
You'll want to start searching for a broker as soon as you decide to buy a home. Talk to several and find someone with whom you think you'll be comfortable working closely. Many of your friends and relatives have probably bought and sold their homes through brokers. Ask them who they used and what their experiences were. You can find out which brokers specialize in the kind of home or the area you want by looking in the Yellow Pages or your local newspaper's classified real estate ads. Or drive through neighborhoods and note the names of brokers on "for sale" signs. When you talk to prospective brokers, ask questions about the areas and types of homes in which you're interested. Do they seem knowledgeable? Most important, is their personal style a good fit with your own?
Now you really begin house-hunting. Your real estate broker will be able to find listings for you, based on your wish list. But don't stop there. You can do your own looking, and then ask your broker to show you the house. Start with the internet. Pick up real estate flyers at local grocery stores and convenience stores. Read the real estate sections of your local newspaper. Drive around neighborhoods that interest you and write down addresses where there are "for sale" signs. Go to open houses. Try everything! A consumer web site loaded with real estate information and tools is located at www.realestateabc.com
Home Inspections and Appraisals
When you make an offer on a home, it's a good idea to make your offer contingent on a home inspection, conducted by an independent authorized inspector. You will have to pay for this inspection yourself, but it could keep you from buying a house that will cost you far more in repairs, down the road. If you are satisfied with the results of the inspection, then your offer can proceed. If you aren't, you may want to negotiate, asking the seller to pay for certain repairs or asking for a lower price.
Your lender will require you to get an appraisal of the house you want to buy, to make sure it's worth the money that you're borrowing. You may select your own appraiser, or you may ask your real estate broker to help you take care of that. To get a general idea of property values, an excellent reference site is Zillow.
Lenders require that you have homeowners insurance, to protect
both your interests and theirs. Like everything else, be sure to shop around
fits your needs. See the Smart Consumer Group page on how to save when
buying homeowners insurance.