Very often, people forget about the great financial responsibility of buying a house. Here are a few tips that will prevent you from getting into trouble.
Getting pre-approved as a buyer will help you understand how much you can spend and, in this way, it will save you from looking at houses that you can’t afford. Besides, you will be in a better position because you will be able to make a serious offer when you find the right house. Pre-approval differs from pre-qualification which is based on a cursory review of your finances. Pre-approval from a lender is based on your actual income, debt and credit history. When you have a thorough analysis of your actual spending power, you’ll be less likely to get in over your head.
Choose your mortgage carefully
Earlier, people used to pay mortgages as soon as possible. Currently, the debt the average person will accumulate is due to credit cards, student loans, etc. It means it’s better to opt for the 30-year mortgage instead of the 15-year. This way, your monthly payment will be lower, with the option of paying additional principal when you have enough money. Additionally, when picking a mortgage, you usually have the option of paying additional points (a portion of the interest that you pay at closing) in exchange for a lower interest rate. If you plan to stay in the house for a long time and considering the current situation on the real estate market, taking the points will save you money.
Do your research before bidding
Before you make a final decision to make an offer on a home, make sure your realtor does some research on the sales trends of similar homes in the neighborhood. We do this for every house our buyers have an interest in. You should especially consider sales of similar homes in the last three months.