How to Make a More Informed House Buying Decision

Because purchasing a home is probably the largest purchase the average person will make, it is important that consumers make an informed house-buying decision. When purchasing a home, it is important for the home buyer to know his credit status and budget, get pre-approved for a home loan, use a real estate professional and get an inspection to make sure the home is structurally sound.

Difficulty: Moderately Challenging

Instructions

1. Take the decision to buy a home seriously. Consider the benefits of home ownership and compare them to the costs of home ownership.

2. Get a copy of personal credit reports. If the homeowners credit need improvement, now is the time to clean up the credit report. If necessary, home buyers should pay off creditors and make sure all outstanding bills are payed on time.

3. Learn about alternatives to placing a down payment of twenty percent. FHA Loans only require a three-percent down payment. VA Loans require no down payment. Some places in the country even have programs to completely cover the entire cost of the down payment.

4. Establish a budget. A home buyer can use online calculators to determine how much she can afford to pay for a home (see Resources below). Once established, a home buyer needs to maintain these price limits.

5. Home buyers should be pre-approved for a mortgage. Although the potential homeowner may be approved for an larger mortgage; he should plan on spending only the amount initially determined.

6. Hire a real estate professional. A realtor who acts as a buyers agent will provide home buyers with information to make a decision in their best interest.

7. Have a home inspection conducted before signing a contract. If a home has obvious structural flaws, the current owner should fix them or the buyer should move on to a different house.

Tips & Warnings

• A home buyer should not make any large purchases on credit after being pre-approved for a home prior to closing on the loan to ensure he does not make himself ineligible for the home loan.

Resources

• Free Loan Calculator at Bankrate.com.

[jasonjacksonjj]

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