Buying Your Home With Less Stress
LESS STRESS AND MORE SUCCESS IN BUYING YOUR NEW HOME
How do you determine whether the purchase of a home makes sense? What's
the easiest way to examine the whole picture from emotions to
economics? In this report you will learn how to separate wants from
needs. You'll learn how research effectively, choose wisely, finance
properly and endure the whole way through.
DETERMINE HOW MUCH YOU CAN AFFORD
Set a realistic budget for yourself. Based first upon your income,
decide how much you can really afford to invest for your monthly
payment. Most financial institutions suggest that your payments be no
more than 28 percent of your total monthly income. This is called your
GDS, or Gross Debt Service ratio. A good Realtor will help you
determine this if you are unsure.
ESTABLISH YOUR NEEDS AND WANTS
Begin your search for a home by making a careful appraisal of the kind
of home you need and want. Write it down take the time to be specific
about your particular requirements. You may want a hot tub, but you may
only need a bath tub.
FIND A HOME THAT MEETS YOUR NEEDS
Some tips for successful house hunting:
Keep a record of all your research data. Write down comments about the
homes that you see. Keep track of your likes and dislikes.
Make sure that your agent is aware of your time schedule and your
expectations. Do you like to look at one or two homes in a session etc?
Discuss all of this with your agent.
Tell your agent about any homes that perk your interest and those you'd
like to know more about. Include the homes you notice as you travel
around the area yourself or those you see advertised in the newspaper.
If you want to spend time driving around looking at homes for yourself,
ask your agent for a list of drive-by homes, which you can consider
first from the outside.
Your agent can than make appointments to show you those that appeal to you.
Express your likes and dislikes to your agent after you see a home.
Honest communication is essential. Remember that the homes don't belong
to the agent! You must be frank about your likes and dislikes to enable
the agent to do the best job for you.
GET PRE-APPROVED
A lender will qualify you for the loan amount that you want. A lender
can let you know what specific loan programs would be best for you. He
can also help you understand terms like GDS and TDS (gross debt service
and total debt service). By looking your current income and your credit
history, your banker can help you understand your budgetary
restrictions.
To be sure that you can afford that dream house make sure that you get
pre-approved. In the approval process, all of your documentation is
completed and submitted to an underwriter. The pre-approval that you
receive is an actual loan commitment from a lender - your guarantee of
loan approval. You will be armed and ready to negotiate for that dream
home.
In summary, you can save yourself time and heartache by meeting with a lender before you start your search for a home.
REAL ESTATE PROFESSIONALS ARE HERE TO HELP
You can learn a lot about an agent by just letting him/her talk to you
about how he/she helps her buyers. {Please read the section outlining
the questions you should always ask before selecting an agent.} Within
a few minutes, you will probably be able to determine if his/her style
is in line with yours. You will also be able to determine his/her skill
level. Ask as many questions as you can up front. Finding a good agent
will save you time and effort.
MAKE AN OFFER
Your real estate agent can help you make an offer to buy that dream
home. It is important to know beforehand whether your agent represents
you or the seller. Some agents work only for the seller. You should in
this case find a buyers agent to work with you. In this case the agent
will be able to advise and support you in making a fair offer. You
should be able to get a good idea of value by having your agent
complete a current market evaluation for the local area of your search.
SAVE MONEY ON YOUR INITIAL INVESTMENT
There are only two major investments to consider when buying a home.
These are the initial investment (including down payment and closing
costs) and the monthly payment (including principle, interest, taxes,
and insurance). Here are some ways to save on your initial investment:
Choose the down payment loan that is right for you. You do not
automatically have to put 20 percent, or even 10 percent, down. You can
put 5 percent, or even 3 percent, down on some loans.
As part of your offer, ask the seller to pay some of your closing
costs. Sellers are usually allowed to contribute to a buyer's closing
costs.
Shop around for your home insurance. A little shopping can save you a considerable amount of money.
You can deduct money paid for discount points from your gross income
before computing your tax, which would effectively reduce the cost to
you. Check with your accountant.
KEEP YOUR MONTHLY PAYMENTS LOW
Get a loan with no monthly mortgage insurance premiums. You may be able
to reduce or eliminate them by paying a little more at closing. By
putting 20 percent or more down, you can eliminate them entirely.
Consider an Adjustable Rate Mortgage. These mortgage types can be up to 3 percent lower than fixed rates.
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