How To Buy A House And Get The Best Deal

TIPS ON BUYING A HOUSE

Buying a home is a huge responsibility and one that most people enter into with a certain amount of trepidation.

It is after all probably the biggest purchase you will ever make in your lifetime. 

How to go about it logically and how to find the best home for your money are things that all homeowners struggle with when facing the purchase of a new home.

Here are some tips to help you through the maze of options and will help you know how best to go about taking the plunge into buying a home.

1. Credit. Without credit, applying for a home loan is pointless. Before you buy is the time to make sure your credit history is excellent. Have a copy of your current credit report before you start looking and know what your credit score is. If there are any problems in your credit history, fix them before you start house hunting.

2. Preapproval and prequalification. Prequalification is the process where banks or lenders look at your finances but preapproval is king. If you get preapproved for a loan before house hunting, you are in the best position to seriously make an offer and begin the process. This saves you time and frustration in looking at homes you truly can't afford and helps you find the right house in a shorter time.

3. Buy within your means. Buying a home you can't simply afford is financial suicide. Rule of thumb is that you should never spend more than 2-1/2 times your annual salary on a home. There are mortgage calculators on line that can help you decide if between a mortgage and other expenses and debts if you can handle the purchase of a home.

4. Consider the neighborhood. Make sure you look at homes in your price range but also look at homes in neighborhoods where you will be happy. If you have kids, always check out the schools and make sure that they are good or will suit your needs as this should be a huge factor in your decision on where to buy. Also check out community services before you consider any home as "the" one.

5. Staying power. If you can't foresee yourself staying in a home for several years at the very least, you probably shouldn't buy. With the costs inherent in purchasing a home, you will probably lose money if you try and sell in a short period of time especially if prices on homes are falling or staying status quo.

6. No money down. GI loans are usually no money down loans but there are also many private and public lenders that offer low-interest mortgages with as little as 3% down. If you can put 20% down, that's great but these days, you don't have to put that much down to qualify for a loan.

7. Find an expert. If you're having trouble navigating the home buyer's jungle and need advice on which house is going to be the best for you in the long run, enlist the services of a realtor or even a mortgage broker. These folks can help you decide if a particular house is going to be a good investment or a not-so-good investment. Try and find someone though who does not have a vested interest in a particular house on the market!

8. Inspector gadget. Always have the home inspected particularly if it is not new. While appraisals are fine for determining the value of a home, they are not for discovering problems with a home that may end up costing you a fortune later to repair.

9. Do your homework. Find out what the homes that are similar in an area have sold for in the past 3 months before you make an offer. If the homes sold for less than the original asking price, calculate that percent and then make your bid slightly lower by at least 2-5%.

10. Mortgaged to the hilt. Check out all your available options when you finally are in the final stages of buying a house. Check out points versus mortgage rate and decide which one offers you the best deal. Traditionally, your best bet is going to be the package that offers the lowest interest rate over all. Always investigate closing costs and ask about any other costs that might be due as well, such as property taxes or will they be built into your mortgage?

Buying a home can be a frightening experience but it can also be one of the most rewarding in your life if you buy wisely and most especially if you get a home that you can afford! 

Sometimes being patient pays off and finding the best situation can take a lot of digging and thinking outside the box. 

However, if you do your homework, have yourself in the best financial position you can be in, no doubt you will come through the home buying experience unscathed. 

Wishing you happy house hunting and finding!

If you have more home buying ideas that you would like to share with us, please leave a detailed comment in the Comments box below!