|MSN Real Estate section|
I have recently come in contact with many people who are looking to buy a new home; some of these people are first-time home buyers. In light of this recent contact, I would like to share some of the best tips I have found thus far about purchasing a home. Please feel free to add any additional tips or questions in the comment space!
1. Check the prices in the area. More often than not, people expect to pay a certain price regardless of the area in which they are buying. Check the prices of homes in the area and see if it is something you can afford. If it is not affordable, you have just saved yourself a lot of time and trouble. Know what you are getting into before you begin looking at homes.
2. Know your price point. Just like it is important to know what prices to expect in certain areas, it is important to know what price you can afford. This includes mortgage payments. Follow this link to use MSN's Real Estate calculator.
3. Find out your monthly cost. Buying a home does not just stop at purchasing the house. You also have to purchase a mortgage, pay taxes, and BUY HOMEOWNERS INSURANCE! So many times I hear people come into the agency after they have purchased a home and they are shocked to hear what the insurance cost is for a home in their area. Please, to avoid shock and stress, call your agency before purchasing a house and get a ball-park estimate of the insurance cost for a home in that area. The estimate won't be 100% accurate unless you call with the details of the exact home you are purchasing, but it will be a good enough figure to give you an idea of what you will be paying. Follow this link to read the most commonly asked insurance questions or to get a quote.
4. Find out how much you will pay in closing costs. Sometimes you only have to pay 50% of it, but other times you might have to pay all of it. Be aware of what is required of you. Closing costs can range up to a couple thousand dollars, so don't be caught off guard!
5. Know your budget. Often times, people start with a set budget and then slowly exceed it to cover insurance costs, closing costs, etc. Fanny Mae advises that a home should not exceed 28% of your budget. Any more than that and things can become very fiscally dangerous.
6. Talk to Real Estate agents. Are prices going to stay low for a while or are they going to increase soon? Know what kind of time frame you are working with so you can get the best house for your money!
7. Don't forget about the extra expenses. Buying a home is expensive, already. However, please do not forget about the extra expenses of repairs and furnishings and everything else that is included in buying a new home. Sometimes, people forget to budget in the small things, such as moving costs or taking a few days off of work for the move. These small expenses can add up quickly, so make sure you have planned an extra "emergency" budget for your new home so that you don't break the bank.
All tips are from MSN's Real Estate section.