Buying a home is not something that you wake up one morning and decide to do between your lunch appointment and your child's soccer practice. The process of becoming a homeowner requires research, planning, and even a little bit of legwork. The first step would be to find out if you can afford properties in your area (or the area that you are moving to). Sadly, this often means settling for a house that is not quite your first choice (a condo instead of that three-bedroom house), but everyone needs to start somewhere.
A loan officer can help you determine how much of a loan you will qualify for (and be able to afford). Ask him or her if the pre-qualification is free. Many loan officers will gladly sit down and hash the numbers out with you for free in the hopes of selling you the loan. Once you have determined how much you can afford, you get to go shopping.
With the internet being as common a tool as the phone book (maybe more so), you will be able to find a significant number of listings for real estate agents in your area online. You will also be able to find a large number of properties and their descriptions and amenities, using the internet as your own personal tool, you will be able to narrow your options down to the properties that you really want to check out, and then contact an agent to show you around. Be choosy as to whom you ask to show a property to you. As the agent that generates interest in a property will be able to claim commission if you choose to buy the property and it's important that they have your best interest in mind and not just the dollar amount that they will pocket after the sale. Under any circumstances should you use the seller's agent as your buying agent. This person would be legally responsible for getting the seller (not you) the best deal possible.
Looking at houses is the fun part for most, and the most painful part for some. No matter how you feel about the process, though, it is important to ask every question you can think of. Bringing someone who has bought a house before might be helpful, as they can suggest things that you would never think to check. Do the toilets all flush? Do the sinks drain? Are the owners leaving that fridge, or do I have to buy one? All of these are important questions to ask before you buy a home because they effect the resale value or the home.
Once you have chosen the property of your dreams, or the one that you can comfortably afford, you will submit a bid proposal through your real estate agent, who will guide you through every detail of the buying process. Over the next month or so you will be forced to endure bidding and counter bidding until a deal is chosen, followed by hours (yes, I mean hours) of paperwork. There are scores of pages of paperwork to be filled out and signed detailing the duties of buyer and seller; assigning, hiring, and evaluating the results of inspectors; detailing property condition and duties related to the condition (like repairing a crack in a wall); as well as much more. With luck and flexibility on your part, the deal can be sealed in about a month, although it usually takes a little longer.
Remember that loan consultant? Once a price has been agreed upon, you will work with your consultant to actually get the loan approved for your new home. He or she will require (you guessed it) more paperwork from you. Grit your teeth and have him fax your approval over to your agent. Sealing the deal requires even more hours of signatures.
Like childbirth, the pain of the process of buying a home is worth the joy and excitement you will feel as soon as it is all said and done. At least until you realize how much money you owe. However owning a home is both financially and personally rewarding.
When you own your own home you have a place to raise your children and to be a part of a community. You can even pass your home down to your children and their children, creating security for generations to come.
Owning your own home can even help you reduce your taxes. You can deduct the interest on your mortgage and property taxes you pay on your home on the tax returns you file each year. These tax savings partially reduce, or offset somewhat, the actual cost of owning your home.
Another good reason to own your own home is that your monthly payments won’t ever go up, that is if you choose a fixed-rate mortgage! A fixed mortgage is one that stays the same for the life of the loan. If the mortgage is 30 years, you'll pay the same mortgage payment each month for the entire 30 years of the loan.
So what are the risks of owning a home, you might ask? Overall, homeownership is a good investment for most people. If you understand the benefits and risks of homeownership, you can make the best decision about when to buy a home.
The first risk is that your monthly housing expenses can increase if your mortgage is higher than what you are used to paying in rent. On the flip side, rent goes up while your mortgage can stay the same. Another risk is that if an appliance breaks, you will have to pay for its repair or replacement. You are also responsible for the maintenance and upkeep of your home and your property.
If you are somebody who plans to move soon, the downfall of owning is that you have to wait to sell your home to move. Depending on the local real estate market, you might not be able to sell your home quickly. You should also factor in the likely expense of hiring a real estate professional. Fees can be negotiated and vary across regions. They also vary from professional to professional.
The last risk is that property values can depreciate. You can lose value in your home for a number of reasons, such as a recession, the condition of your home not being kept up, or a drop in a neighborhood's home values. If your home loses value and you have to sell it for less than you owe, you will be required to repay the full mortgage.
Many people don’t even consider buying a home as they believe that you need great credit to become a homeowner. The fact is, you may still be able to buy a home with less-than-perfect credit. And remember, you can improve your credit over time.
Another myth about buying a home that often keeps people from looking is that you need to put 20% down. There are many types of mortgage products and programs that allow low and no down payments. But remember to factor in other costs such as closing costs, property taxes, moving expenses, and repairs.
So are you ready to buy your first home? Certainly the benefits outweigh the risks.
Greg Sullivan has sinced written about articles on various topics from Install Flooring, Renovation Ideas and Real Estate. Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.. Greg Sullivan's top article generates over 1900 views. to your Favourites.