HOW TO BUY A HOUSE
Tips for First Time Home Buyers
So you've decided to buy your first home... wonderful! Here is a helpful list of
the homework that you need to do first:
Get and review your credit reports. Don't even start looking for a home until
you've seen your reports from Experian, Equifax and Trans Union. This website
will show you how to get your reports, as well as how to read them and then
what action to take if you find negative entries, either credit problems or
credit reporting errors. This is step one and it must be completed before you
go any further.
While you are in the process of tweaking your credit report for a lender to
view take some time and decide how much you can afford to spend each month.
Think about how much your rent is now and how much more you could spend each
month and still be comfortable. You may find that you can qualify for a loan
for as much as $350,000 but that doesn't mean that payments on such a loan
would fit into your budget. Be very careful not to get yourself into a
situation where you buy a house and then have no money to have a life because
of the monthly payment.
Once you feel that your credit is in decent shape you need to make an appointment with a lender and have them PREAPPROVE you for a mortgage. Preapproval means that you have met all of the lenders requirements and that you have a loan to use to buy a home. PREQUALIFIED tells you how large of a loan that you could get if you meet all of the lenders qualifications.
Now it's time to find a professional real estate broker to help you find a
house and to help you through the process of actually making an offer and
purchasing a home. Look for a _buyers agent_ to help you. A buyers agent
represents and looks out for your best interests rather than the sellers
interests in a real estate transaction. You will probably feel much more at
ease and comfortable with this kind of agent working with you. A _sellers
agent_ works for the seller and will try to get the best possible deal for the
seller and if you are not comfortable with purchasing a home that can be
intimidating.
When looking at properties with your agent look with your eyes before you let
your heart see the house! This is very important advice especially for
unseasoned first time home buyers. It is so easy to fall in love with the
charming esthetic qualities of a home and in the process overlook potentially
costly flaws or pay more than the house is worth which brings me to my next
point regarding home inspections.
When you do find a house and you are ready to make an offer don't skip the
home inspection! A good home inspector will normally charge between $300 and
$400 to look over a property before you make an offer. This is money well
spent. A inspection will find costly problems that you will want to avoid
buying like foundation problems, electrical or plumbing problems, etc. Keep in
mind that no house is perfect and that if your inspector finds some repairs
that need to be done that you can usually negotiate the price of the repairs
into the final purchase price.
Always have an attorney review the offer and the purchase and sale agreement.
These are legal documents and you need to understand them and make sure that
they contain all of the protections you need before you sign them. Attorneys
fees will vary so make some calls first.
Insuring your home is enforced by law so you need to make sure that you can
insure your home. If the home has had past claims filed for water damage you
may find that it's difficult to find a company that will cover the house. If
you do find a company that will sell you a policy you may find that you can't
afford the monthly payment so be sure and do your homework before committing.
Be very careful before you settle on a mortgage. Mortgages are a high pressure
sale so don't fall for a slick sales pitch without first weighing your options
and seeing what else is out there. Educate yourself with the many different
options that are available for financing. Understand all of the terms first and
take your time so that you select the deal that is best for you.
Good luck and happy house hunting!
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