Best Home Buying Practices

Best Home Buying Practices

Buying a house is one of the most enjoyable things in a person’s life. Not only is it a great financial investment but it can also be one of the best assets in the future. When buying a home, it’s seen as a long-term decision that usually tends to pay off and be a smart investment. The right way to make this type of monumental decision is to define your goals and how you plan to achieve them. This of course relates to all parts of life not just buying a house. But if you have trouble doing it, you can consult so you can determine the next steps.

Goal Setting

When you are examining your goals for buying a home, there are many things to consider. The most obvious is how much house you can afford. This is a very important question because you may be paying for your house over the next 30 years. You don’t want to be tied down month after month just trying to make your mortgage payments or worse, losing your home because you missed your mortgage payments.

The length of time you plan to own a home should also be evaluated as you develop your goal of buying a home. You may be buying your first start-up home or planning to build the house of your dreams. It’s important to know because that will influence a lot of your decisions later on.

Pre-Approval for Home Loans

An important step in the home buying process is getting pre-approved for a home loan. It tells real estate agents and home sellers that you are serious about buying and know what you can and cannot get. Nobody likes wasting their time or working for free, so be polite and ready when you start the home buying process. Getting pre-approved for a home loan accomplishes several important items. First, you find out what the bank is willing to lend to you, and second, you can find out if any problem areas need fixing in your credit history.

Down payment

There are several types of programs available for first-time homebuyers to get into the home without having to save 20% of the purchase price as a down payment. However, many lending institutions want to see at least 5% saved for a down payment. There are advantages to being able to lower 20% on your new home purchase. Perhaps most importantly, you don’t need to borrow as much money as possible and save in the long run. Also, most lending institutions require personal mortgage insurance if 20% is not met. This only adds to your overall home loan costs and increases your monthly mortgage payments. Plan to save as much money as you can before buying.

School, Environment, and Time

Price is usually the driving factor when buying a home and often determines the environment in which you live. Honestly, this shouldn’t happen unless it fits your long-term goals.

If you have children, you may want to check schools in several neighborhoods to find the school that best suits your child, one that has easy access, and transportation.

If you spend a lot of time at work, which most of us do, you may want to drive during rush hour to see what to expect. This applies to other important places that you will visit. The key is determining whether you can live with the required time and perhaps the lack of comfort to achieve your goals. Often this is most likely not a problem but wouldn’t you want to know that you would be shipping an hour and a half every day on the freeway?

Must have

When buying a home, we all have our wish list. In this list, we have things we should have and things that are fun to have. This list is useful when it costs more to own everything on the list than you can afford. Usually, the more items you need, the higher the house price. Find out what you can do without controlling these costs.

Home Buying Tips

  • Shop and compare home loan products
  • Know your needs and wants in a house first
  • Take your time – don’t rush it
  • Be persistent and check the market every day
  • Don’t make hasty decisions
  • Don’t spend more than you can afford
  • Perform home inspections

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    About the Author: Barbara J. Shirk

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