According to a recent article on suite 101’s website, Buying a house will probably be the most expensive purchase in most people’s lives. Here are some tips to help make sure everyone gets the best deal.
Always get pre-approved for a mortgage. Most banks will do this for free, and with no obligation. Make sure to get good estimates of property taxes and insurance so this can be factored into the pre-approval decision. Some towns have much higher taxes than others.
Make sure to first check all local banks for their rates. Some offer better rates for current customers. It can also be convenient to be able to stop by in person for any questions that pop up, and have local numbers to call. Local banks and credit unions will accept same-day loan payments in case you are running late.
Try to put down as much of a downpayment as possible. Many banks require that home buyers take out Private Mortgage Insurance, or PMI, if their downpayment is less than 20%. This is an additional cost that can be avoided by saving up for at least a 20% downpayment before thinking about purchasing a home.
Finding the House
Do as much research before meeting with a real estate agent. It pays to narrow down your options to a few locations. Then you can get to know the areas well and research home prices. This can allow you to make sure you are getting the most house for your money.
Most people should avoid purchasing a fixer-upper, or a house that needs a lot of work. Unless the buyer is extremely handy around the house and has a lot of free time, things often don’t end up getting done. Also, if you buy a house that needs some work, make sure the important things (kitchen appliances, electrical system, plumbing) all work. Then, if for some reason the economy tanks, other smaller renovating projects can be put off for later.
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