Sunday, November 3, 2013

What To Do If You Want To Buy A House

Interest rates for a 30 year fixed mortgage are currently at 4.25% a few months ago the same 30 year mortgage was at 3.5%.  With that said rates are pretty low and your first step is to head to your bank and get a pre qualification letter.  Make sure you have good credit and can make a 20% down payment although there are banks outside of NYC in small towns that may ask for a lower down payment.

The pre qualification letter tells the real estate agent that you are serious about buying and not just wasting their time.  Your mortgage banker will ask you a few questions in regards to the state you want to buy in and a range you would like to consider as low or as high as your budget allows.

The letter will only last you 3 months then it will expire.  Take a look at a few homes and then make your choice.  Plan ahead set enough time to see the homes you want in the 3 month period you can go beyond that period but don't get another pre qualification letter as this will lower your credit score.

What to look for when inspecting a house?

Make sure you look at your home on different sites such as Trulia, Century 21 and Zillow.  Once you narrow your search get in contact with a real estate agent. If you are not familiar with the neighborhood then make sure you inspect the area to get a glimpse at who your neighbors will be and what the local economy for the town looks like.  Once you get to the property before you go in take a look at the roof.  Are there any shingles missing and are there nails sticking out? You also want to inspect for any cracks around the foundation of the home anything bigger than 3/4 of an inch may mean trouble.  If the home has a crawl space take a look if the floor inside looks wet that means rain is coming in and this can be costly to fix. Once inside the home look at the windows and make sure they don't look foggy or blurry. Make sure to check out the walls and floors for cracks.

Know the zoning on the home you don't want to buy a home that will not allow you to rent out to multiple unrelated tenants if that is the reason you are buying the home. The next steps will be to get the home inspected professionally and get the paperwork done once you have come to an agreement in regards to the price.
One thing to remember is that you don't need to get your mortgage from the bank you normally do business with, if a better rate is offered by another bank then this is another option to consider.  If you are buying a home in another state you may be better off using another bank either to save money because your bank does not have a branch in that state or if your bank will make the process more lengthy and more costly compared to the banks in the state you are buying.

I have seen banks in small towns charge less and demand smaller down payments to their locals due to the fact that the town's people have lower incomes.  Buying a home is a lengthy process but it can be a very good investment.  As with any major purchase careful planning and good counsel is a must.

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