Buying Tips
Research Is The Key
Home sellers won't call you with an offer to buy a maintenance-free
home with a wonderful mortgage. You have to find the gems yourself!
Only by reading available materials, talking to friends and experts,
and spending time looking at different homes, schools, and neighborhoods
will you end up with your Australian dream. Avoid the nightmares
by learning how best to buy and maintain a home.
Make A Plan
Every important decision needs to be clearly thought out. Developing
a home buying plan can help you focus on the important factors and
organize the entire process. You may even want to use a binder with
sections on house hunting, home financing, service providers, etc.
Loan pre-qualifying helps you determine the home price you can afford
and presents you as a genuine prospect to the seller. A lender typically
uses the 28% formula (your monthly mortgage can't exceed 28% of
your monthly income) in approving your loan. Planning your actions
and getting pre-qualified will keep you out of the panic mode and
allow you to take advantage of opportunities. A thorough plan will
save both time and money!
Value
The classic rule of buying the worst house in the best neighborhood
still applies. If you buy with an eye towards improvement, you can
customize the home to fit your needs. The saying, "make money
buying a home, not selling one," should keep you focused on
the long-term importance of the purchasing price.
Create A Top 10 List of Amenities
When shopping for a home, list the features (fireplace, fenced-in
yard, new appliances, etc.) that are most important to you in deciding
on which home to buy. Establishing "your criteria" early
on will save time shopping for inappropriate homes and may keep
you from buying a home on a whim -- for example, because of a circular
stairwell -- that doesn't meet your fundamental requirements. Your
top reason for buying a home should be the value you are getting.
Some of your top 10 amenities should logically be sacrificed if
an incredible value is available.
Fixed vs. Adjustable Rate Mortgages
Which type of loan fits your particular needs? If this will be your
first home or a "transitional home" -- one you plan to
own for a short time. Whichever loan you choose, make sure that
you scrutinize all the closing costs. If you are required to have
a mortgage escrow account and private mortgage insurance, make sure
you understand the terms and cancellation procedures. Also, make
sure there are no prepayment penalties so that you can utilize an
accelerated mortgage plan. A good mortgage reduction plan can save
you tens of thousands in interest costs, and shorten your loan term,
with only small extra principal payments. If you experience negative
changes in your job, health, or marital status, you can revert to
the standard payments in your mortgage contract.
Sign A Contract That Protects You
Make sure that the contract you put on a house allows you to arrange
financing, inspect the home and negotiate any problems that you
uncover. Ensuring that the contract you sign will minimize potential
legal battles will let you swim in your new pool with your family
and neighbors instead of with the sharks.
Put Yourself In The Seller's Shoes
You are about to make one of the most important decisions that will
affect both your life and the life of the seller. If you take time
to understand the reasons the seller bought the home, their reasons
for selling, and the home improvements they have or have not made,
you'll be in a better position to evaluate the home and negotiate
a better deal. In the end, the home buying process excludes the
professionals and comes down to the individuals buying and selling
the home. A closer look at the seller may help you in deciding whether
and for how much to buy a particular home.
Develop A Mortgage Shopping Chart
One of the biggest decisions to make before putting a contract on
a home is how to finance the purchase. There are 10,000 lenders
competing for your mortgage business. The days of simply walking
into the community bank and negotiating with the loan department
manager are over. Today, you can apply for a loan over the Internet
or even use a mortgage broker to shop for your loan with hundreds
of lenders. Create a chart that lists different types of loans,
fees, and at least five mortgage providers (including a mortgage
broker).
Get A Quality Home Inspection
Although it is hard to believe, more people pay for inspections
before buying used cars than when making the biggest investment
of their lives -- their homes. Paying for a qualified home inspection
before you buy a home isn't just spending "a little extra"
for peace of mind; it's absolutely essential for anyone who doesn't
want to spend thousands of dollars for repairs.
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