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7 Tips To Homebuying

Homebuying can be very intimidating. But not if you do your research first. It's normal for Americans to want to own a home. We all want a place to call our own. But as I said in the beginning, it can be rather daunting.

If that's where you find yourself, then have no fears. I love to share tips and ideas on how you can make the entire process easier to understand and relieve you of as much stress as possible.

Below you'll find 7 tips that can help you in this process. Feel free to browse around this website since it contains over 600 pages of free information on the home buying and mortgage process.

So let's get started.

TIP #1 Don't buy a home that you cannot stay in for 5-7 years. 

If you think your stay will be short, then rent a house rather than buying. With the closing costs and other transaction fees to get a mortgage done, you will most likely lose money if you have to sell sooner rather than later. Even if home prices are increasing, it could become a losing proposition for you if you're not careful. Of course it would be worse in a market where home prices are falling. 

TIP #2 Make Sure Your Credit Is In Good Shape.

Unless you have a rich uncle, you're going to use credit when homebuying and will need a mortgage. So get a FREE copy of your credit report to see where you stand. When you think about, what use is there in shopping for a home before you make sure your credit is in good condition. Look it over, correct any mistakes you find and then get ready to apply for a mortgage.

TIP #3 Only Buy a Home You Can Afford.

One quick and dirty way to look at homebuying is to take 2&1/2 times your annual salary and that would be your home price. It can help you more if you use some of our mortgage calculators to get a much better idea. For FHA home loans, they like to use a maximum of 31% of your monthly gross income to be allowed for your total house payment. This would include principal, interest taxes and insurance. So if you earned $3000 a month, your maximum payment would be $3000 x 31% = $930.  

TIP #4 Know Your Down Payment Options.

Not many folks can put down the 20% required for a large number of mortgage products. You will find a whole variety of down payment options. FHA & VA start at 3.5% down, while other mortgages require 5%-10%. If you want to avoid mortgage insurance then you would need the 20% down payment.

TIP #5 Seek Out Professional Homebuying Help

We all know that with the internet you can easily find access to homes for sale. For 99.9% of buyers, it is best to use a professional real estate agent to help you make that purchase. The ideal situation would be for you to get a "buyers agent" since they will be looking out for your interest rather than the sellers. 

TIP #6 Know Your Mortgage Product Choices.

If you're a first time home buyer like many folks are that browse this website, avoid the trap of trying to buy down interest rates using points. With the current mortgage rates at all time lows (as of this writing in Oct 2013) you should find some good deals using the FHA loan product. It offers low down payments, help with your closing costs using seller concessions and great interest rates.

TIP #7 Get Yourself Pre-Approved For a Mortgage.

This is a very important step in the homebuying process. Most real estate people worth their salt will encourage you to do this anyway. By getting yourself pre-approved now, doing this you know exactly how much home you can afford since the lender has reviewed your income docs, credit history and rent history if you have one. Just make sure you have had your loan application reviewed by an underwriter and received an approval letter. This is much different than pre-qualified.

So there you have it. 7 fast tips on the homebuying process. Of course there are many other tips you can learn. I just wanted to give you a few ideas that could help you in your search for a new home. 

There has never been a better time to buy in history than right now. The market conditions are improving from the 2008 mortgage meltdown. Home prices are starting to rise. Lenders are even beginning to lift the some of the qualifications to make it easier to get a loan.

You still have to be very careful, but with the right help, you can buy a new home with confidence. 

Leave 7 Tips To Homebuying and return to Home Buying Process main page. 

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