For those who are the first time home buyers, ready to take the plunge into the market, here are some tips to help decide if one should go ahead with the choice of buying home or not.
1. To start with, it is advisable to have a thorough check of the selling prices of homes that are comparable in your area. Zillow and Homegain are some of the websites which can give a prospective home buyer a general idea on what one should expect to pay. What you can also do is a fast lookout of actual MLS listings in your area on a number of Web sites. This includes the site of the National Association of Realtor.
2. You must check out what you can actually afford. You can also use Bankrate’s mortgage calculator to know what your payment might be. You could also use MSN Real Estate’s home affordability calculator in order to get a sense of the maximum you should spend.
3. You must also have a check on what your total monthly housing cost will be. This includes taxes and homeowners insurance. You could again use MSN Real Estate’s home affordability calculator to get to know for the maximum amount that you might spend which includes taxes and insurance. However, in some instances, what you would be paying for your taxes and insurance escrow could double the mortgage payment.
If you wish to know as to what you will pay in insurance, then you are advised to pick a property in the area where you wish to stay and call a local insurance agent for an estimate. Herein, though you are not obliged to get the insurance, however, you will get a fair idea of what you will pay if you buy. In order to decipher an idea of what you might end up paying in taxes, Zillow publishes all over the country property-tax information for homes.
4. As the next step, you must find out as to how much you will be expected to pay in closing costs. It is advisable you should not overlook the upfront price of making a settlement on your home.
5. You must have a look at your budget and come to a conclusion as to how a house fits into it. Fannie Mae suggests that buyers should send no more than 28% of their income on housing costs.
6. You must also speak with genuine real-estate agents in your area about the real-estate atmosphere. The question is whether they think if the prices will continue to fall or the area has hit bottom or will rise soon.
7. It is no doubt that buying a house is a big way to build wealth. However, maintaining the investment can be labor-intensive and expensive. This can happen when costs on such as roof repairs, plumbing problems, new appliances, arise. Such expenses can drill a hole in your pocket. There will be no landlord to turn to.
Hence, you must consider all the pros and cons before taking the plunge to buy a home.