Money Saving Tips in Buying a Home
The following tips in buying a home will help you minimize the painful risk that most first time home owner have been through.
1.
FIND IT.
- Whether the house you're looking for is in
foreclosures or not, you have to know where
to find it.
Sources
a. Newspapers
-
b. Realtors
c. Internet
c. For Sale by Owner (FSBO).
Pricing- $$$$!!
- Most of the homes being sold are overpriced. Why, simple...more
money, more profits and of course higher commission for the realtor. An easy way to find out the average selling price of your target
home area is by using comparative analysis (CMA).
Writing the Offer
- Sorry, a handshake is not good enough when it comes to buying
a home. A "Purchase Home Contract" is what you will need when you make an offer. Click here for more on Purchase Contract.
- Most
realtor will require you put in at least $1000 for deposit! The truth is there is no minimum amount requirement except government
repossessed homes. So you could put in deposit for $10, $20, $100 or even $1000. They want you to put in more so it will be harder
for you to back out of the deal.
2. FUND IT.
Pre-Qualification
- Get pre-qualified right even before you make an offer to purchase.
Financing
a. Credit Report
- Before a lender will consider your loan seriously is they will be very interested in finding out about
your FICO score. FICO score range from 300 to 850. A higher FICO score could qualify you for a lower interest rate as compared to
500 points or lower. But it's completely up to the discretion of a particular lender.
b. Loan Documents Required
- Have the following
handy when you apply for a loan;
- W-2 (last 2 years)
- Last 3 months of your employer's pay stub
- Last 3 months of Bank Statement
(make sure you include all the pages, including blank one)
c. Banks or Mortgage Broker
- Loan officer for banks are getting paid through
salary. This means that whether your loan gets approved or not, bank loan officer will still get paid.
- Mortgage broker are getting
paid through commission. This means that they will only get paid if they could get your loan approved through them. And mortgage broker
will go the extra mile just to get your business.
d. Downpayment
- Zero downpayment for a veteran or active duty military, you could
acquire your financing via VA. Navy Federal Credit Union also offer their member zero downpayment. FHA financing is only 3% downpayment
requirement.
e. Interest rates
- See the section on mortgages and interest rates for
detailed info about mortgages and interests suited
for you.
f. Homeowner insurance
- Shop around for best home owner insurance premium
and coverage. It's possible that your existing
home owner
insurance may not be the best rate that you could get
especially if its an investment property.
3. FIX IT.
- If you're
just a first time home buyer, it's highly recommended that you hire a professional inspector .
- Concentrate in improving the curb
appeal.
- Use neutral color for paint.
- By Doing-it-yourself you could save hundreds or even thousands in labor costs. Consider if
it's worth
your time doing it yourself and the quality of your work.
- Save those receipts for everything you used during
the repair.
You never know which part or materials you want to return or replaced.
4. SELL IT/KEEP IT.
- Try to sell the home yourself and keep
the 7% commission you might have paid if you let a realtor sell it for you.
- Live on it for at least two years and keep of all the
profit from your equity -- tax free!
