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Home Buyers Tips

  1. Buying vs. Renting; why buy a home? Renting a home is a good idea if you plan to relocate in the near future. However, if you plan on staying in one place for a while, you might want to consider the benefits of owning your own home.
    1. You can finally decorate the way you want! Most people want to buy their own home in order to have the freedom to make their environment into something more personalized to better suit their needs and tastes.
    2. Buying a home is an investment. Real estate appreciates over time which means it increases in value. A homeowner who buys a good piece of property may be able to sell it later at a substantial profit.
    3. You can deduct your mortgage interest and property taxes from your income during tax season.
    4. As your mortgage decreases, your equity increases. Homeowner's can get home equity loans based off the amount of equity you have in your property.
  2. What kind of home do you want? Before you go shopping for a home, write down what you are looking for and make a check list to take with you while you look at homes. Here are a few tips to help you keep track of the homes you have looked at.
    1. Take a digital camera with you and take pictures. Start each set of pictures with a shot of the outside front to keep up with which pictures go to which house.
    2. Take notes of anything, good or bad, that catches your eye.
    3. When you leave, give the house a overall rating of 1-10 and write it down in your notes.
  3. What kind of home loan should you get? There are a variety of different loans to choose from. Your best option is to discuss your situation with your real estate agent. They can help find a lender to work with, but remember to comparison shop. Here are some questions to ask the lenders to help you get the best terms.
    1. What are the differences between a fix-rate home loan, an adjustable rate loan, interest only loans, and negative-amortization loans?
    2. What is the annual percentage rate and the interest rate of the loan?
    3. How much are the fees for loan origination?
    4. Are there any discount points? How do discount points work?
    5. Ask if the lender to guarantee the GFE. Lenders are required by law to supply the borrower with a good faith estimate (GFE) for the total costs of acquiring the loan. However, they are not required to guarantee it.
    6. Are there any prepayment penalties?
    7. How long will it take to process the loan? Make sure your closing date does not conflict with how long it will take for approval. It is wise to seek pre-approval.
    8. If you have an adjustable rate loan, be sure to ask about loan locks.
    9. Ask your lender and your real estate agent if there are any home buying programs that you might qualify for.
  4. What should you consider when making an offer? Your real estate agent can guide you through this process. Below are some things you should consider when making your offer.
    1. Properties that have been on the market longer and have recently lowered their price are more likely to accept low offers.
    2. Properties that have been listed recently are less likely to accept low offers.
    3. Include a contingency to have the home inspected. If major problems are found with the property, then the buyer can rescind the contract. If repairs are needed, negotiate who pays.
    4. Look at a comparative market analysis before deciding what you will offer to help determine the market value of the property.
    5. Negotiate for any items you might want included in the contract including furniture, appliances, etc.
    6. Clearly state the amount of time the sellers has to respond to your offer. 
  5. How do you find good homeowner's insurance? The key to finding good insurance at a reasonable price is comparison shopping. Do your research. Asking the following questions will help you get the policy that is right for you.
    1. What does the policy cover?
    2. What does the policy not cover?
    3. How much is your premium?
    4. How are insurance claims handled?
    5. How can you lower your insurance costs?
  6. What should I expect at closing? Before the date of closing, you should know exactly what you will have to pay out. The costs at closing are largely dependent on what has been agreed upon between the buyer and seller. If you are using a real estate agent, they can help you determine exactly how much money you need for closing. Make sure to read the documents before the closing date and ask your agent any questions that you may have.


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