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When Should I Buy A House
Monday, August 18, 2008
As if the home buying
process isnt nerve wracking enough, an unstable market presents unique challenges to future home buyers. With the steady stream of bad news, increased foreclosures and tightened restrictions on mortgages, it can be more difficult to buy a new home now than it has been in the past. Lenders are getting picky and it can spell bad news for those individuals on the house market.
If you already qualify for a mortgage, however, and have a good income with strong credit, you can be in a prime spot to purchase a home
. With declining home prices and an established mortgage, the house market is not as treacherous for established homeowners as it can be for first time buyers. There are some tips and tricks, however, to help you stay within a safe area for your future home purchase despite an unstable market scenario.
Do not over reach yourself with a large mortgage. It might be great that you can afford a certain price on paper, but you need to take the time to work out how much your mortgage payments will actually be each month. Can you afford to have this as a monthly expense while still saving for your retirement, college, increased portfolio, or a new car? What are the bills that will accompany a house that is that large? Can you afford those along with your mortgage? What are your annual taxes? Know this information before you get too caught up in a big number that will mean little to you until you break it down in monthly installments.
Real estate agent differences can affect home buying as well. All real estate agents are not the same. Some will call you regularly while others prefer to stay quiet until they have found the exact right house for you. Ask a number of questions to your potential real estate agent to find the one that is best suited to your personality. Do they experience with title searches? Can they help you spot potential problems with the property? Having a good real estate agent that fits your personality will make all the difference in your future home shopping experience.
Even the best real estate agent can miss some things. Look online to find crime statistics, school districts, home prices and comparables. You can find an array of quality information about your future potential neighborhood by taking the time to search online. If you are armed with this extensive knowledge, you can make better deals and know what you are getting into with your future home. Look for virtual house tours and extensive pictures. Check out the neighborhood, the annual taxes, and much more at the touch of your fingers.
Walk the Streets of your future neighborhood. No matter how much information you find online, you cant really know a neighborhood until you spend some time there. Look for open houses in the neighborhood that are not the property you are interested in to see other homes in the area, meet the neighbors. Drive through your future neighborhood at all hours of the day to see what kind of neighbors you would have. Are there a lot of kids, working parents, or older couples? You can find this out through your frequent drives.
Negotiate with the home sellers
of your future home. You do not know what the sellers situation might be and it never hurts to try to negotiate a lower price. Although it might insult them and you could lose the house forever, some home buyers have found that asking for more in their offers has been very successful for them. If the seller is under a lot of pressure to sell or has had few offers, they might be more willing to listen to your demands.
Up front, foreclosed properties
might seem like a steal. They are much less expensive and can be a great deal when it comes time to sell. However, if the homeowner has been unable to make their mortgage payments, it is highly likely that they have been able to keep up with the general maintenance of the home itself. You will have to purchase a foreclosed property as is many times and you could be stuck with a property that has larger issues than you are willing to deal with.
When you purchase your next house, get into a mortgage you can afford. Especially for first time buyers, getting a good mortgage and knowing which lenders are right for you can be tricky. There are unethical lenders out there offering deals that are literally too good to be true. Finding a good mortgage and lender can ensure the stability of your financial portfolio and home status. If you are caught with an unsavory lender and something bad happens in the future, the status of your home and ability to secure another mortgage will come into question. You could lose everything due to bad choices made now with your mortgage company.
Get a home inspection. You need an unbiased view of the property you are about to buy. In order to ensure that you know of all your propertys potential problems up front, it pays to get a great home inspector. You want to be able to trust the person and know that what he or she says is legitimate. If your home inspection finds problems that far exceed what you are willing to deal with, you have the opportunity to back out before it is too late. The home inspection is the smartest way to buy a home no matter what the economic situation is.
Finally, buy your home with a long term plan in mind. A home purchase is a huge investment and the savvy buyers look to find a house that will fit them now and years down the road. You can invest in your home and make any necessary upgrades to help you grow with the property, but staying with your home will help to increase your investment and make you more financially secure in the future.
If you have bad credit, consider purchasing a house through a lease purchase
or rent to own. Now is a great time to purchase a house at a fixed purchase price, and rent the house until you can afford to get your own mortgage. This gives you time to raise your credit score which will lower your monthly payments by getting a better interest rate.