8 questions to ask before buying a home


  1. Why am I buying a home?
Obviously you want – and need – to have somewhere to live. Your home is your castle, your safety, where the heart is, and all that. But why are you buying as opposed to renting? Areyou buying alone or going into it with a partner, family member, or friend? There isn't a right answer, although it should go without saying that buying a home is a much longer financial commitment than renting -- both to the space as well as to the people involved. You’re going to have to jump through a lot of hoops in order to secure a mortgage, so if you’re going to have to stretch yourself to be able to afford it, you may want to think twice. It’s also a big commitment mentally, so if you really don’t think you’re up for taking care of a home for years (and years) to come, then maybe you want to wait – or forego buying a home altogether. Don’t buy a home because it’s the Thing to Do, or because your peers are buying a home.
  1. How’s my credit?
Speaking of jumping through hoops, if your credit rating is poor, you’re going to have a hard time not only getting a mortgage, but getting a *good* mortgage. Which means, you’re going to pay more for your mortgage by way of higher interest rates and stricter rules when it comes to prepayment penalties. It’s not impossible to get a mortgage, and if you have a good reason to get a home, then there are ways that you can get a mortgage if you have poor credit. But your credit does make a difference as to the outcome of your mortgage process, so you'll want to clean it up before you want to get a mortgage.


  1. How do I choose a lender?
If you think that the only options you have out there for mortgage lenders are the mainstream banks, then you’re in for a big surprise. There are plenty of lenders out there who only deal with mortgages and mortgage-related business, and those lenders are called monoline lenders. They typically have some advantages to the banks, such as lower interest rates and flexibility when it comes to stated income requirements. Monoline lenders are still in what's called the "A" space, which means that they deal with well-qualified candidates, just like the banks. Read more about different types of lenders, as well as private lending options.


  1. What kind of loan do I need?
Every mortgage is not created equal. Yes, you have a principal and a balance and you make payments each month (or week, or however you set it up). But apart from that, there are many different loans out there to meet the needs of borrowers in a number of different situations. There are also loans geared toward investors, self-employed borrowers, and a mortgage broker can help you figure out which one is right for you.


  1. How do I find a realtor or any home professionals?
Realtors love to advertise. You probably have seen fliers and billboards for real estate agents, ads in local magazines and newspapers that. I’m sure you know at least one or two. But just because you know a real estate agent doesn’t mean that they’re the right realtor for you. You need a real estate agent who will fight for you, but not push you into doing anything that makes you uncomfortable. We have more tips on finding a realtor here.


  1. What home buying mistakes do I avoid?
Hindsight, as they say, is always 20/20. Because it’s just a big purchase, many new homeowners have that moment of buyer’s remorse soon after closing the deal and receiving keys to the property. The most important home buying mistake to avoid is buying a home that you can’t afford. Others include buying in the wrong area and looking for homes in all available outlets, including social media. When in doubt, ask your realtor.


  1. How do I negotiate an offer to purchase?
Finding a home isn’t the last step. Depending on the housing market where you’re buying, you may be up against tactics such as bidding wars, bully offers, or specific offer dates. Even if your market isn’t particularly competitive, negotiations between buyer and seller can turn frustrating at best, and nasty at its worst, causing you to lose your desired home. Rely on your real estate agent. Negotiating is indeed an art; you may as well leave it to the professionals.


  1. What do I need to make sure happens when I close the deal?
Do you have your money ready? All of it? Has all of the paperwork been verified? Is all of the wording correct? Did you remember to get home insurance? Your real estate lawyer is the ringmaster when it gets to this stage. He/she should be able to walk you through all of the required documents and make sure that nothing falls through the cracks. As for dealing with the movers, well, that’s all on you.


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