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Ten Tips For Buying And Borrowing
If you’re planning to take advantage of
falling home prices and low interest rates, here are ten things to keep
in mind as you begin the buying process:
1) Enlist the help of
professionals. In this volatile housing
market, a good real estate agent and a good mortgage professional are
vital to the home-buying process. Before you do anything else, make sure
you have qualified professionals on your side.
2) Do your research.
Make sure you thoroughly research different neighborhoods, school
districts, types of homes, comparable sales, crime statistics, etc. Your
real estate agent is your best source for information.
3) Make a housing budget.
Although any budget you make will more than likely change over time,
you’ll want to have a good idea of what you can afford in terms of a
mortgage, general housing expenses, and other unexpected expenses.
4) Get a pre-approval.
If you know ahead of time exactly how much you can
afford, you’ll be much better prepared. Also, the seller will see that
you’re ready to buy and that you have the backing of a lender.
5) Make sure your credit is good.
Credit scores are more important now than ever. Consult with your
mortgage professional to see how you can improve your credit before you
buy.
6) Don’t change your financial
situation. Major changes in your financial
status—such as buying a new car or changing jobs—will affect your credit
profile so try to maintain your current spending and cash inflows.
7) Look for what you can afford.
As a general rule, your monthly mortgage
payment shouldn’t exceed 28 percent of your gross monthly income. Don’t
get in over your head by taking on a mortgage that you may not be able
to afford.
8) Don’t overbuy.
Don’t buy a house that is larger than you need. Not only will your
monthly mortgage payments be higher, but your general housing
expenses—cleaning, upkeep, repairs, landscaping, etc.—will be higher as
well.
9) Location is the key.
The old saying about location is still true today. Location should be at
the top of your list when you start your home search. Think about how
specific areas will change in the next 10-20 years and how those changes
will affect your home and its resale value.
10) Don’t try to wait out the
market. Don’t gamble on interest rates and
home prices because even the experts have been known to be wrong. If
you’re ready to buy a home, don’t wait around. Interest rates and
housing prices are affordable right now.
Although these ten basic
guidelines are indeed very general in nature, if you take them to heart,
you’ll be much more likely to have a relatively pain-free home-buying
experience. ∆ |
