Buying A home Is One Of The Best Investments You Can Make! Home equity remains the largest single savings vehicle for most Americans. In addition to the tax incentives of home ownership, and the ability to tap into your home equity if the need arises, buying a home is a wise and prudent investment for most people. Here are some tips for buying a home in this market.
1. Use A Real Estate Agent - . When choosing a real estate agent, look for one with experience in working with buyers and sellers and with knowledge of the neighborhood you are considering. The purchase of a home is a serious long term commitment on your part and a good agent will recognize that buyers need time and patience so they can satisfactorily sort out the myriad's of factors involved in a purchase decision.
2. Know before you go - The first step in the home-buying process should always be to have an idea of the type of property one wants to buy. By separating the "must haves" from the "wants," homebuyers can focus on what's really important.
3. Research Your Mortgage Options Well Before You Make An Offer - You won't have enough time in the five days sellers normally allow to get all of your paperwork together, determine the best kind of mortgage, who is offering the best rates etc. Consider getting a contingent letter of approval for a loan, or an actual loan commitment prior to making an offer. The former is not actually a loan commitment, but rather a contingent approval for a loan up to a certain amount. While it has relatively little enforceable value, it nevertheless can impress a seller, who might be more willing to accept a lower offer because of the perceived financial capabilities of the seller. Its also possible to get approved by a lender with a longer term "lock" on the interest rate in order to protect you from subsequent rate increases. While this should substantially increase your negotiating leverage, keep in mind that you pay more directly or indirectly for the longer commitment, either in terms of the rate and/or points.
4. Shop for the most favorable mortgage option - People can face misunderstandings and even lose their homes if they don't fully understand their mortgages. It's imperative for homebuyers to educate themselves on the risks of the different types of mortgages and select the right one for their family. Early on, shop around for the most favorable mortgage rate and terms. A difference of even half a percentage point can mean a considerable savings over the life of a loan.
5. Make The Offer - Real Estate never sleeps. If you're trying to buy a hot property, you have to move quickly, or you could possibly lose it. Sometimes people think that by starting really low they'll end up with a better price on a house, but actually it usually works the opposite way. Properties in good shape are rare, and they don't stay on the market for long. Make your offer competitive.
