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10
Stress-reducing Tips for First-time
Buyers
Every homeowner has been a first-time
buyer once in his or her life, so
you're not alone. But buying a home
is one of the largest purchases you'll
make, so how do you know if you're
ready to take that next big step?
These 10 home-buying tips can help
reduce the stress of buying your first
home.
- Renting vs. buying. If your
job and family status are likely
to be stable for the next few
years, or you're planning on remaining
in the same city, now may be a
good time to consider buying.
If you think you may need to look
for work outside the area or want
to have the flexibility to move
on a whim, and then put off homeownership
for a while.
- How's your credit? Your credit
standing will affect the terms
of your mortgage, so it's a good
idea to try and strengthen your
credit rating before applying
for a loan. You can help do this
by paying your bills on time,
reducing your total debt load
and avoiding any unnecessary inquiries
to your report.
- Pinch those pennies. Besides
having to save for a down payment,
other expenses such as closing
costs, homeowners insurance, and
more often seem to come out of
the woodwork when you're purchasing
a home. Most lenders will also
want you to have a "reserve"-money
left in your savings account after
you've covered all the costs.
Frugality now will payoff later
when you're enjoying your new
abode.
- Tax advantage. Mortgage interest
and property taxes are generally
deductible. So, you may be making
a larger monthly payment than
renting, but remember to take
into consideration the amount
you're saving in taxes. See your
tax advisor for details.
- Weigh your options. Are there
any financial programs that may
help you get into your first home
sooner? Federal and state-backed
loans may make it easier to qualify
for a loan by offering programs
with little or no money down.
- Where do you stand? Pre-qualification
or pre-approval of a loan will
not only help you know how much
home you will qualify for, but
also will show owners you're serious
about buying. Contact your bank
or mortgage broker for procedures
on either of these options. Just
remember to limit the number of
inquiries on your credit report
by only authorizing credit checks
with the one or two lenders you're
serious about.
- Location, location, location.
Figure out what's essential to
you, such as school district reputation,
crime rates, convenient shopping
areas, local parks or whether
there are children in the neighborhood.
Rank these qualities in order
of importance. Focus only on neighborhoods
that meet those criteria.
- Know what you're getting into.
Most offers made on a home sale
include a professional home inspection.
Before you sign on the dotted
line, you should be confident
about the condition of the home
and the expenses you may incur
as a result of purchasing that
particular house.
- Knowledge is power. Learn about
the broker's role in your home
buying process. Brokers and real
estate agents are key players
in home buying transactions and
it pays to do a little research
to make sure you're getting the
best representation available.
- Is a condominium the right
choice for me? Depending on your
tax bracket, a condominium may
be an affordable option for you.
Although the market for condominiums
is unpredictable, it may be a
good way to get into the real
estate market. But timing is everything.
Entering on a market upswing will
help you gain equity for your
next home, while buying on a downswing
could mean you'll be in that home
for a while.
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