Things to consider while buying a house
1. How long can you stay in that place
If you are not able to consider a long term stay at a place I can say, owning a house is not meant for you. You may end up in loss with the transaction costs of buying and selling even if it is in the rising market. The situation will be even more worst if it is in falling market.
2. Carefully consider neighborhoods when you’re looking at buying a home.
Areas where home values are falling or where many homes have been on the market for several months may be risky if you don’t plan on staying in the home for very long. When you go to sell the home, you want to be able to sell quickly, and get at least as much for the house as you still owe on the loan principal.
3. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover. Having a down payment of 10 to 20 percent will make it easier to qualify for a mortgage in today’s market. If you can’t come up with that much cash there are still loan programs that don’t require buyers to put a lot of money down. However, you have to have good credit, and you must be able to document your income and assets to qualify for those loans when buying a home
4. Aim for a home you can really afford.
You should buy housing that runs about two-and-one-half times your annual salary. But you'll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
5. Mortgage interest rates are still on par with historic lows.
You’ll likely get a lower interest rate if you can make a 20 percent down payment when buying a home, and the rates will go up if you make a smaller down payment.
6. Buy in a district with good schools.
Even if you don’t have a school going aged kid at home, it is always better to choose a home close to a well known school. Having a school close to your home will boost your selling rate.
7. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, it is better to use a professional agent for the process. Look for an exclusive buyer agent who can help you with strategies during the bidding process.
8. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points -- a portion of the interest that you pay at closing -- in exchange for a lower interest rate. If you stay in the house for a long time -- say three to five years or more -- it's usually a better deal to take the points. The lower interest rate will save you more in the long run.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that's about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that's just the bank's way of determining whether the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.
|
