Points To Analyze Before Purchasing Your Own Home

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Everyone wants to have a place to call his or her own home. It is a serious milestone in ones life because a home is often the biggest purchase in a lifetime and any mistakes in the home buying process can be costly. Owning a home brings a sense of pride and freedom which cannot be compared to just renting because when you own your own home you are not bound by a landlord’s rules. There a lot of things to consider when buying your own home, especially since the home buying process is complicated. Making the decision on which house is the right one for you may seem so easy at the time that you face it but there are actually more underlying factors that can accurately determine whether or not you should really purchase a specific home.

So before you invest in your most valuable asset here is a list of points to analyze before purchasing your own home:

1. Credit Rating
The most important step to make is to get your finances in order first. Your credit reports are a continuous look at how you manage your finances. Know exactly what your credit reports say about your financial history before applying for a mortgage.

2. Find out how much is the home you can afford.
Take all aspects of your current financial and personal situation into consideration. Use guidelines like debt-to-income ratio. Most lenders often suggest that your total debt-to-income ratio should not exceed 36% and your mortgage debt should be less than 28% of your monthly income.

3. Understand how mortgage works and get a mortgage pre-approval.
Familiarize yourself with the mortgage laws, structure and options so you will be able to decide on the right loan and lender, which is very crucial to your home buying success. It’s a good idea to know the background of the loan process before talking to a lender. A seller will always consider a buyer who has a mortgage pre-approval from a bank.

4. Determine what are your needs and wants.
Be familiar with your the real estate market in your area and figure out beforehand what your needs and wants are before you start looking at houses. It can be nice to show an expansive house around to your friends but do you want to end up paying for our room that you do not necessarily need?

5. Be prepared to work with real estate agents.
Seeking the help of a knowledgeable sales agent or broker is a very good move. Find an agent who understands your needs and whose judgment you trust. Choose an agent you’re comfortable with and can provide all the knowledge and services you need.

6. Search for your home.
Since the advent of the internet, it has also become a great tool to look for houses for sale. There are a lot of listing services out there that will make your house hunting a lot easier. Narrow down a list of the homes you like in the area you want then you could plan an afternoon drive to preview the houses. Examine the neighborhood of the home you’re planning to purchase.

7. Acquire the help of a professional home inspector or a licensed engineer.
Your lender will require a home appraisal anyway but that’s just the bank’s way of determining if the house is worth the price you’ll pay. But you should also hire a home inspector separately, like an engineer who has experience in doing home surveys preferably in the area where you’re planning to buy a home. Their job is to point out potential problems that will need costly repairs in the future.

8. Buy a home in a district with good schools/colleges.
If you have school-age children be sure to put into consideration the schools, colleges or universities near your home. Even if you don’t have children going to school and when it comes to sell, strong school districts are important for many homebuyers, which helps boost property values.

9. Make the bid/offer.
Be sure that the amount you’ll pay as a down payment will leave enough for closing costs, emergencies and other expenses. Your opening bid must be based on the sales trend on similar houses within the neighborhood. Consider the sales of similar homes in the last three months. It is best to sit with your agent, advisor or attorney to adjust your offer and also to take care of all the contractual considerations.

10. Be careful to avoid last minute changes.
Everybody involved in your real estate transaction should check its progress on a daily basis as your closing date nears. Stay on top of things so that you’ll immediately know if there is a problem that you must deal with.

11. Closing the deal.
Take note of the complete legal description of the property; down payment and financial details; your proposed move-in date; length of time the offer is valid; warranties (if any) and other relevant details when closing the deal. Almost all of your home buying concerns are way behind you now and you’re on your own way to closing the deal, also called “settlement” which is the event that transfers the ownership of the property to you.

12. If you can’t stay put, don’t buy.
This is an additional tip, if you can’t commit to living or staying in one place for at least a few years, then owning a home is probably not for you, or at least not for now. You may end up losing money if you sell any sooner with all the transaction costs of buying and selling a home.

Considering these points will surely help you in your home buying process. But never hesitate to ask questions from your real estate agent, your lender, your attorney or other people who are helping you complete the home buying transaction. Remember that you and your family are the ones who are going to live in your new home, not anybody else – so don’t ever settle for anything less.

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