The time has come and you are now ready to buy a new home. The purchase of a new home will by all likelihood be the largest investment you will make in your lifetime. So why rush in to a decision that will affect you financially for 30 or more years. Even if you sell your home within 5 to 10 years, the type of mortgage you obtain will have a large affect on the equity in the home.
Before you start your search for a new home, you should ask yourself (and be honest) how much you can afford to put toward the purchase of your new home.
Many factors help to determine if you can afford the home you are looking to buy. The most important factors are the amount of income, debt, down payment, and the terms of the loan set by the lender.
Once you determine what you can realistically afford, you’ll need to obtain a copy of your credit report and begin the process of finding a lender for a home mortgage. Don’t just start filling out applications everywhere you go, rather shop for a while. Armed with a copy of your credit report, begin talking to lenders about mortgage terms, interest rates, etc. until you find a lender that you find a good deal with.
A lot of buyers try to purchase a home on their own without the help of an agent in an effort to save a few dollars. These agents and brokers have acquired years of experience and knowledge about real estate transactions. There is no way of you gaining this experience in the 60 to 90 days period you will be buying a home. You risk making a mistake that could cost you a lot more than the fees you would have paid to the agents brokerage firm.
This doesn’t mean that you need to let them tell you everything. You still need to continue to educate yourself as much as possible so that you fully understand what is going on.
Nearly all agents are paid a commission for their work on the real estate transaction. They have a vested interest in helping you purchase your new home.