Looking to buy a new home right away? Congratulations! You’re among the lucky few who are actually looking to buy rather than sell in the current economic climate, and that may tilt in your favor, as home prices go lower and lower. Even though your next home may be cheaper than it was five years ago, follow these eight tips to make sure you save even more.
Buy a house you can afford. If there’s anything that this downturn has taught us, it is to live within our means. Buying a really expensive house by racking up extra credit might be appealing, but it can turn out to be more expensive in the long run. With some companies still laying off employees, you do not want to be out of a job and paying for a house that is beyond your means. As a rule of thumb, do NOT buy a house that is more than two and a half times your annual salary.
Get professional help. We get it. The Internet’s made the home search even more easier. However, instructions on wikihow still can not replace the insight of a professional agent. You might end up paying the person, however, do not forget that they’re trained to do what they’re supposed to do: find the right house for you. And a lot of them are very good at it.
Keep a check on your credit score. Many people require a mortgage to buy a house, so make sure that your credit history is not dotted with red pen here and there. Do not make risky decisions and ensure that your credit card bills are one hundred percent correct. You do not want to end up paying a higher interest rate based on just that.
Get pre-approved. Doing this will help you to only look at houses that you can actually afford and narrow your list down to realistic options, hence removing the tendency to look for the generally expensive and unaffordable options. To get pre-approved, the bank will make a thorough check on your credit history, income, and debt.
Buying or renting? If you think you are not going to stay in one place for more than a few years, renting a place might turn out to be a better option for you. A house is an investment and also an asset. It takes time to sell it, and you might end up having difficulties if you have to move from New York to Houston within a year. Be smart-there are different ways to live in a house rather than just buying it.
Get some cash. Typically, you would have to pay twenty percent of the house’s cost as down payment, so you would need to plan and increase your savings. If you can pay more than the twenty percent, you might be able to get a larger loan, but if you pay less, you might have trouble finding the right loan for you. There is also a chance that you will have to pay more private mortgage insurance, so start stuffing more cash under your pillow right away!
Play smart. We understand-you want that one house really bad. However, that does not mean you make the highest bid for it. Reckless bidding might lead you to pay more than your means and beyond the actual value of the house. Narrow your list to three or four houses and be smart while bidding-start low, and the seller might actually end up giving it away in frustration!
Waiting is good, but don’t wait too long. You might be waiting for the price of that perfect home to go down by even more. Be careful-you’re not the only one looking for a place to live. With other predators in the market, too, you need to be careful and swift while buying. You don’t want to lose a house that’s worth it!