Buying your first home? Surely, you cannot contain the happiness that you are feeling right now. There is nothing more exciting than being able to obtain the house that you have been dreaming about. However, buying residential real estate should not be taken as a very simple thing to do. This is because there are things that a buyer must consider before finally signing the contract with a seller.
1. Many homeowners say that their house is their huge source of riches
This fact came from the survey of NAR or the National Association of Realtors and such survey shows why it is vital to own a home in the United States. Every homeowner must keep in mind that a house is not only a place where people can live, but it is also an asset.
2. Buyin a house you cannot afford in the first place is a NO-NO
A lot of people lost their houses to foreclosure due to resorting to creative financing just to have the house they cannot really afford. Be sure to understand how much your bank account has and how much exactly you can afford. After that, get the mortgage loan that can truly help you and which will not augment to a level that you can no longer pay.
3. Pay a down payment
Mortgage lenders and banks want buyers who can pay a down payment as it can protect them. Once you have a down payment, there is equity. This means that a part of the house is actually yours. If the value of the property declines, you might end up owing more. The down payment is very essential to lenders because if you don’t have it, you will be obliged to pay private mortgage insurance.
4. You may need to pay a closing cost to obtain a mortgage
The closing cost involves application fees, appraisal fees, inspection costs for your mortgage, a title search and other different expenses. Usually, you will have to pay them upfront or it will be added to the mortgage cost. You can even bargain a deal where the seller will pay the closing cost, although this is not common.
5. Get pre-approved to know how much you can truly afford
Prior to looking for your house, you can go to a mortgage lender or bank with your monetary information and know exactly how much they can lend you. This way, you can focus your search only on a house that is within your budget.
6. The seller may shoulder the commission of your agent
In many instances, buyers do not pay the agents their commission. Rather, it is the seller who pays 3% to the agent who helps them sell the house.
7. Real estate investments can be used to evade inflation
Since real estate is a tangible asset that increases in value, it is normally considered to protect a homeowner from inflation.
8. Generally, mortgage interest is tax deductible
This means you can lessen the taxable income through the interest that you pay.
9. Get ready for property taxes
These kinds of taxes are set through the assessed value of the house. They need to be paid each year; otherwise the tax collector may take your house.
10. Does purchasing a home make sense?
Normally, purchasing a house makes sense if you have plans to stay there for two years or so. That period is normally the duration in order for your real estate to increase in value. Moreover, if you live there for less than two years, you can expect to pay higher taxes the moment you put the house for sale.