 So you're ready to buy a home and whether you are a first time home buyer or not, there are a few essential points to consider before jumping into any real-estate transactions. Therefore, before you leap into the considerable undertaking of buying a home, here are a few things you should ask yourself and know: #1. How much home can you afford? A. Whether you are buying a first home, or any home for that matter, it is normal to get carried away with excessively nice homes that are beyond your budget. It is important to stay reasonable and within your price range. If you don't know how much you can afford with your current income, try MSN's Home Affordability Calculator to get a good idea of how much home and monthly payments you can handle. Always buy a house with a monthly mortgage payment you can afford to avoid the pain many homeowners are feeling nowadays. #2. What is your credit score? A. Before you even begin your search for a new home, it is check your credit report and review it for accuracies. Make sure you dispute any discrepancies and raise your score by paying off some items and increase your chances at a better interest rate. (Note: start by paying off the smallest balances first.) Also, make sure you pay all your bills on time each month to avoid paying higher interests rates. #3. Have you done any research? A. Another crucial step in the home buying process is to research various loan programs, the local real estate market, and several different mortgage lenders in order to find the best deal. Be sure you understand everything about loan terms and other real estate jargon and get good advice from someone who is well-informed and trustworthy. I've seen a lot of people get sucked into adjustable rate mortgages without completely understanding the terms and the fact that their rates will increase substantially after the short-lived introductory period is over. As a result, make sure you do your research and know exactly what you're getting into before getting into any transaction. #4. Are you house searching sensibly? A. Please don't get crazy about the aesthetics and details of your home, especially if you're a first-time homebuyer. Instead, look for the aspects that may affect your property's value and future benefits. Be sure you're looking out for the long-term if you plan living in your home for the next decade or so. You should be interested in future market values of your prospective home and also the potential upgrades you can make in the future. Pay close attention to the quality of the neighborhood and its future, including school districts, local tax rates, and flood zones. #5. Are there benefits of owning the home? A. Obviously the benefits of purchasing a home vs. renting are significant. Bottom line is: renting wastes your money, while owning makes money and helps to minimize your taxes. Consider this point: when you rent, you help pay someone else's mortgage and get no claim to ownership. Meanwhile, monthly payments on a mortgage gets you closer to owning the home outright. Whatsmore, the appreciation and equity in your home can earn you a nice profit when it comes time to sell your property. Next, homeownership helps to build your financial credibility. And furthermore, homeownership fosters better neighborhoods because homeowners are concerned for their neighborhood as it directly affects their property's value. And lastly, buying a home is essentially, the American dream of everyone that lives in this county. (Posted by: K. Skowronski)
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