So you have made the decision to get into the home ownership world… Congratulations! Once you’re on your path to home-ownership there are certain precautions you’ll be wanting to take to be sure to minimize your risks . Here are some tips to help make your purchasing experience a more positive one:
Know what you’ll be paying for upfront. Across the home loan lending process, you’ll be faced with a torrent of charges, some higher than others. From origination and escrow fees, to title insurance and property taxes, some may seem inflated while others fall in accordance with what you would expect. You must never be afraid to ask about a fee you are feeling uncomfortable about or do not get. And no matter what, try avoiding any kind of early pre-payment penalty.
Everybody wants to have the option of paying off their 30 or 40 year mortgage earlier than scheduled. The reward in doing so is not only owning your house outright but saving on interest fees. Work with a bank who’s prepared to cancel any pre-payment penalties or can offer you the ability to refinance your mortgage at a lower rate.
Watch out for the all too familiar”bait-and-switch”. We have all fallen victim to this one at some point in our lives. A bank may try to reel you in with low interest rates, no money down, or no closing costs, only to disqualify you with a less than perfect credit score. If you are feeling uncomfortable with the broker, or that they aren’t being truthful, then move on to somebody you can trust.
Don?t let real estate agents pressure you into a purchase. Real estate agents are inspired to sell houses to earn their living. They may make you to get something that does not quite meet your expectations or pressure you to use their preferred lender.
You always want to comparison shop for the best mortgage rates and programs. Remember, the Realtor works for you and has a fiduciary responsibility to guard your best interests.
Only buy what you can afford. It isn’t difficult to get wrapped up in the hype of super low interest introductory rates. Staying in your debt-to-income proportions can help forestall you from over-extending your debt. Use one of the affordability calculators to pinpoint the minimum and maximum amount you are able to afford before going house hunting and stick with that number.
Never buy a home purely on impulse. At some point during your search for a home you can decide to accept less or get caught up in a bidding war for a home you don?t necessarily want to purchase. Staying in your budget can be a real challenge, especially if a bank approves you for a higher loan amount then you can afford. Give yourself permission to walk away from a controversial deal and see how you feel about it the following day.