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Home Buying Tips

Buying a home can be thrilling and nerve-wracking at the same time. Not only is it probably the biggest purchase of your life, but the process can also be complicated, with its unfamiliar jargon and surprise expenses.However, this stress can be relieved by simply having the needed knowledge. In this article, we have compiled a few tips that will help you in the process, and make buying a home a far better experience. 

      1. Determine how much you can afford 

Before you begin searching for a home, it is important not to waste your or your realtor's time looking for homes you cannot afford. You need to know what is actually in your price range. Be honest and realistic with yourself. 

   2. Get your credit reports straight 

The home buyers credit score is among the most important factors when it comes to qualifying for a loan. Checking your credit before you begin the process of buying a house is crucial, as it will help determine your interest rate and loan terms. Therefore,  check the reports for mistakes, unpaid accounts, or collection accounts. Repairing damaged credit can be time and money consuming. So if you think your credit needs work, begin the process at least six months before starting to look for houses. 

      3. Set a budget 

Don’t just buy a house because you “can”. Think about other payments you have to deal with, such as car payments, college tuition, retirement, savings... etc. Also, make sure your house doesn’t cost more than 2.5 times your annual salary. If your overall income is $100,000, then $250,000 should be your max. 

    4. Figure out which type of mortgage you want

A mortgage is a loan that uses the home you buy as security. This loan is registered as a legal document against the title of your property. When buying a home, make sure you know all your mortgage options. This usually includes the fixed mortgage rates vs. adjustable mortgage rates. A fixed-rate loan is when the interest rate and payment stays constant for the entire loan, usually 15 or 30 years. An adjustable-rate mortgage has a fixed interest rate that then resets after a certain period. To learn more about the different types of mortgage, follow this link. Moreover, it is advised to have professional help from someone in the industry to help determine which type of mortgage suits you best. 

     5. Figure out your down payment

The down payment is money you give to the seller directly, while the rest of the payment goes to the seller from your mortgage. Down payments are expressed by percentages; banks usually want a 20% down payment and let you avoid mortgage insurance. The reason for a down payment is that you risk losing that money if you can’t make the house payments and end up in foreclosure. This gives you an incentive to make your mortgage payments.

    6. Get a pre-approved letter

It is smart to get a pre-approval, where the lender can look at your income, assets, and credit history and confirm in writing how much they are willing to lend you and at what terms. Having a pre-approval letter in hand makes you look much more serious to a seller and can give you an upper hand over buyers who don’t. 

      7. Understand the HOA

Make sure you get all information about the neighborhood you are planning to buy a house in before you make the purchase. One of the biggest surprises to most home buyers is the Homeowner’s Association (HOA) fees. If you are buying into an HOA-governed community, make sure to read the rules and regulations beforehand. The fees you may be required to pay range from a couple of hundreds to a few thousand dollars a year, depending on the community and amenities. If you do not like the rules and regulations after reading them, then you should avoid buying a property in such a community altogether.


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