Guest Post: First Home, First Things to Do
Buying a home is probably the most important financial decision that most of us make in a lifetime. With the average American spending 33 percent or more of their salary towards paying off a mortgage, the decision to buy a house cannot be made lightly without weighing the pros and cons associated with such a move. The inability to meet even a single repayment can have serious repercussions, the biggest of them all being foreclosure and no place to call home anymore. For first time home buyers who are thrilled that they’re finally able to afford a place to call their own, here are a few tips to ease the buying process:
- Check the selling prices of homes in the locality you’re interested in before you settle on one house and agree to the asking rate.
- Find a lender and talk mortgage details. Determine if you will be able to make payments one time each month. Take your homeowners insurance, property taxes and mortgage payments into consideration during these calculations because they’re all recurring monthly costs.
- If you’re hoping to repay the loan early, make sure there’s no prepayment penalty worked into the agreement.
- Make sure you meet all the conditions of the lender before the deal is due to be closed. Give yourself enough time to get home inspections completed; waiting until the last minute can cause unnecessary delays in the entire process.
- Make sure you ask your lender to provide you with a good faith estimate (an approximation of the costs you’re likely to incur in connection with the sale) including the closing costs so you’ll know upfront how much you have to shell out.
- Make it a point to buy title and homeowners insurance. Title insurance protects you from any shady aspects that arise with respect to the ownership of the property you’re interested in purchasing while homeowners insurance covers your home and its contents.
- If your lender is planning to outsource the loan to another lender or bank, you may have to change the beneficiary listed under the homeowner insurance commitment clause. Ask your lender who you must name.
Buying a home one decision that must not be done impulsively, not if you don’t want the hassles and troubles associated with unscrupulous lenders and agents who are out to take you for a ride.
By-line:
This article is contributed by Sarah Scrafford, who regularly writes on the topic of luxury real estate for sale in Canada. She invites your questions, comments and freelancing job inquiries at her email address: sarah.scrafford25@gmail.com.