Steps to buy a house

When you’re thinking about whether or not to buy a home, here are some basics to consider. Do you feel secure in your job and can you afford it? Do you have time and aspirations to keep a house in good condition? If the answer is yes, there are some very basic and important steps to buying a house.

Whether or not you’re a first-time homebuyer, you’ll probably want to use a broker simply because they know the market and can be a provider of valuable information about the homebuying process. You’ll need to make sure the broker has access to the Multiple Listing Service (MLS), the industry service that lists all properties for sale by most major brokers across the country. Normally, the seller pays the brokerage commissions, so technically they are working for them. The truth is, they won’t make a dime if you don’t buy and therefore you might consider them to be working for you. In any case, they are professionals and have a license that could be jeopardized if they do not protect all parties.

When there’s a depressed market, you’ll have some very cheap deals on new homes and used homes to choose from. A new home may cost you a bit more, however, you may have to spend a considerable amount of money to bring a second owner’s home up to current energy codes, as well as a host of other repairs.

You will find three well known requirements regarding the purchase of a property, location, location, location. Take a look at the neighborhoods, schools, and other services that play an important role in making a neighborhood attractive. These features may not be that important to you, however they may be important to your future buyer. This factor will apply even to a house that has a negative aspect that you just feel you can accept and live with; future buyers may regard them as “business killers.” Check crime rates, taxes, transportation, city services, and also local zoning laws as to how they will fit into your lifestyle.

It is essential to select a neighborhood where prices are increasing; Never buy the most expensive house, buy on the lower end because it’s like the saying, “when water rises, all boats float up.” Plus, it’s always easier and faster to sell the low-end house instead of the high-end one.

Are your finances such that you can currently afford to buy a home? Can you get a mortgage if the price of the house is more than three times your annual salary? The mortgage company will keep your monthly obligations at approximately 20% of your salary. Smaller debt coupled with a larger deposit will qualify you to buy a more expensive home.

Since a home mortgage is one of your biggest investments, approach it sensibly and conservatively. This is your home where you are choosing to raise your family, and a second investment. If you expect your salary to rise or inflation to appreciate your home and overbuy, you’re gambling with your future. If things go a little wrong, this could limit or even prohibit future purchases and make your credit score bad, as well as increase future interest rates on all loans, including credit cards.

Investment advisors can advise you to definitely buy the biggest house you can afford, pay as little as possible, and spread out the payments as much as you can. If you take note of foreclosure rates during 2010, you’ll want to make as much as possible, buy a home within your means in a great location, and try to get any 15-year mortgage for the best interest rate. If you think this is too big a bite, you can achieve the exact same goal by taking out a thirty-year mortgage and making two full payments each month. You may pay a little more in interest, but if you hit hard times, you can always go back to the required payment; however, as soon as you can, apply discipline and get back to your strategy.

If you think you don’t need a broker, here are several tips to follow while making one of the best purchases of your life. Request a Good Faith Estimate (GFE) from your lender. A GFE lists the closing costs that you will be charged at closing along with your deposit and down payment. If you’re low on cash, try negotiating with the seller to pay some of the settlement costs. This is not an unusual request for buyers, and in the worst case, the seller will simply say no. Another option if you are short on money is that many lenders will allow you to transfer your closing costs to the mortgage, however you will have to pay a higher interest rate on the loan, perhaps 25% or 50% more.

Buying a home is a legal action that requires your signature on legal documents along with a mortgage note. If you have retained an agent, he is qualified through training and license to advise you as well as protect her interests. If you breach a trust with the buyer or seller, you could lose your real estate license. If you do not have an agent or if you are uncomfortable with what you have been told or read, you should hire a lawyer to review all written documents just before closing.