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FutureStarrBuying a house
Until recently, homeownership had been a cornerstone of the American Dream, with most children growing up with a family member or close friend living in their home.As soon as you can, start reading Web sites, newspapers, and magazines that have real estate listings. Make a note of particular homes you are interested in and see how long they stay on the market. Also, note any changes in asking prices. This will give you a sense of the housing trends in specific areas.
Before you start looking for a home, you will need to know how much you can actually spend. The best way to do that is to get prequalified for a mortgage. To get prequalified, you just need to provide some financial information to your mortgage banker, such as your income and the amount of savings and investments you have. Your lender will review this information and tell you how much we can lend you. This will tell you the price range of the homes you should be looking at. Later, you can get preapproved for credit, which involves providing your financial documents (W-2 statements, paycheck stubs, bank account statements, etc.) so your lender can verify your financial status and credit.
Real estate agents are important partners when you’re buying or selling a home. Real estate agents can provide you with helpful information on homes and neighborhoods that isn’t easily accessible to the public. Their knowledge of the home buying process, negotiating skills, and familiarity with the area you want to live in can be extremely valuable. And best of all, it doesn’t cost you anything to use an agent – they’re compensated from the commission paid by the seller of the house. (Source:www.discover.com)
There may be some reasons that you might not want to put down 20% toward your purchase. Perhaps you aren't planning on living in the home very long or have long-term plans to convert the home into an investment property. Similarly, you might not want to put that much cash down. If that's the case, buying a home is still possible without 20% down.Similarly, it’s worth thinking about the longer-term implications of a home purchase. For generations, buying a home was almost a guaranteed way to make money.
Your grandparents could have bought a home 50 years ago for $20,000 and sold it for five or 10 times that amount 30 years later.Many financial experts suggest living in a home for five years before selling it as a guideline. Don't forget to factor in the costs involved with buying, selling, and moving. Also, consider the breakeven point for the mortgage fees associated with the home you are selling. If you can't decide what city or town you are going to live in and what your five-year plan is, it may not be the right time to buy a home. (Source:www.investopedia.com)