how to buy house

The process of buying a home is both a thrilling and exhausting experience, but with the help of the right agent and some useful tips, you can own a beautiful — and affordable — piece of the American dream.
For instance, do you really need a real estate agent? Why do you need to be pre-approved by a bank? How do you negotiate the deal? And, how do you keep from getting a lemon? Let’s start with the finances — getting pre-approval for a mortgage.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible.
When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate.
Reason: When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
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If you stay in the house for a long time — say three to five years or more — it’s usually a better deal to take the points.
Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house.
From working mothers raising their kids in RVs to stay-at-home moms who spend their days organizing events for the Oil Wives club, meet the moms of North Dakota’s oil boom.
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If homes have recently sold at 5 percent less than the asking price, you should make a bid that’s about eight to 10 percent lower than what the seller is asking.
Before you go shopping make sure you have the cash on hand for a down payment and a mortgage lender who is willing to provide you with a home loan at an affordable rate.
In addition to mortgage and principal payments, buying a home means paying for insurance, maintenance and real estate taxes.
“Real estate is not as liquid an investment as it was 5 or 10 years ago,” cautions Steve Domber, president of Prudential Serls Prime Properties, a real estate broker firm operating across New York state and Connecticut.
Get pre-approved by a lender or mortgage brokers (and check out your broker at nmlsconsumeraccess.org). Pre-approval can help expedite the closing of your purchase, a process that given the current economic climate can take months.
Skirting the traditional 20% down payment means a mandatory additional expense: private mortgage insurance.
Are rents cheap and homes costly in your city? Are you planning to move in the next year or two? Is your job looking iffy? If any of these apply, buying might not be a good move.
What you can afford depends on your income, credit rating, current monthly expenses, downpayment and the interest rate.
If you expect the buying of the house to be a simple, straightforward affair, then you’ll probably only need a realtor, the escrow company, and perhaps a mortgage broker.
The general rule of thumb here is that you can afford a house that’s 2.5 times your yearly household salary.[5] For example, if your annual combined salary is $85k, you should be able to afford at least a $210k mortgage and very possibly more.
Credit unions often offer lower closing costs to their members.) Put the total into a mortgage calculator (you can find them online or make your own in a spreadsheet.
Do this before contacting a real estate agent so you have a firm idea of what you can afford, and you don’t accidentally fall in with a house that you cannot afford.
Some homebuyers don’t believe that you should lead with your highest offer, but you could easily find yourself being outbid and never get the chance to bid on your house.
If your home is more expensive than the comps, or the appraiser has to find comps in a different subdivision or more than 1⁄2-mile (0.8 km) away, beware! Never buy the most expensive house in the neighborhood.
Bringing more than a decade of residential real estate experience, DeSimone is a recognized national real estate expert and has appeared on top media outlets including CNBC, Good Morning America, HGTV, FOX News, Bloomberg and FOX Business.
Brendon DeSimone is the author of “Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling,” the go-to insider’s guide for navigating and better understanding the complex and ever-evolving world of buying and selling a home.
Brendon DeSimone is the author of "Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling," the go-to insider’s guide for navigating and better understanding the complex and ever-evolving world of buying and selling a home.
DeSimone is the founder and principal of DeSimone & Co, an independent NYC real estate brokerage providing individualized services and a fresh, hands-on approach.
What was left was replaced with a model community, and the rest of the people moved to towering projects, the Jefferies and the Brewster-Douglass, where Diana Ross grew up.In the early ’80s, the entire north half of the neighborhood was demolished to make way for a 362-acre auto plant, heavily subsidized by the city, state, and federal governments.
It’s been happening quietly and for some time, between transplants and natives, black and white and Latino, city and country — tiny acts of kindness repeated thousands of times over, little gardens and lots of space, long meetings and mowing grass that isn’t yours.
Our debt is about $18 billion and there is talk about cutting the pensions of people who worked for the city for 30 years and selling the masterpieces from the city’s publicly held fine art museum, the Detroit Institute of Arts.
The city is talking of disinvesting in entire neighborhoods such as mine — literally letting the neighborhood go to seed and removing city services, shrinking the city in what some have termed as “white-sizing”; upstarts backed with foundation money are talking about transforming an entire neighborhood into an 2,475-acre urban farm.
There was no way I could live in the house when I first bought it, so I moved out of Will’s to Forestdale, a verdant block in Poletown that was walking distance from my new home.
"Having a large down payment may slow down the process of getting your house, but it will save you money in the long run, since you won’t have to pay for private mortgage insurance," explains Smith.
"You’ll have to shop around to find a lender that knows how to approve a buyer without a credit score," explains Smith, "but it is possible." FHA rules specify that if you have a good payment history on the bills that you do pay – like rents, utilities and the like – that stretches for at least 12 months, you can be eligible for an FHA loan.
"Instead of looking for good risks, many of them are looking for no risks." With this in mind, budgeting to buy a house means that you may need to plan for a large down payment to make the loan feel safer for the lender.
Many buyers go through real estate agents who specialize in foreclosures, but if there’s a particular property you have an eye on, Blomquist says you can approach the lender directly after the but before it’s listed for sale.
First of all, if you’re new to the foreclosure market, don’t even think about buying a property at a foreclosure auction, says RealtyTrac vice president Daren Blomquist.
If you’re seeking to purchase a foreclosure with an FHA loan, Blomquist says the requirements pertaining to the condition of the property are stricter.
The bank that owns the title isn’t going to make needed repairs for you before the sale, and it’s unlikely to lower the price to compensate you for repair expenses you’ll incur.
Factor the cost of any necessary repairs into your budget, since foreclosures are generally sold “as-is.” “Be aware with these REO or bank-owned properties that a lot of them are in pretty poor condition,” Blomquist says.
The bank is required to pay off senior liens like back taxes, you won’t have to kick out anyone living there and you’ll be able to inspect the homes for damage and figure out how much you’ll need to set aside for any repairs.
An increase in foreclosure activity might sound like bad news, but it’s actually a good sign for these markets because it means the logjam that’s been keeping housing in the doldrums is finally starting to break up.
Prospective buyers can’t inspect the home to determine if there’s any damage — highly likely if the house has been vacant for a while — or find out if there are any senior liens (such as outstanding taxes owed on the property).
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And you’ll see it again with other Netflix original programming: The new season of “Arrested Development” that debuts next month, for instance, is owned by News Corp.’s Fox studio (News Corp.
Perhaps you’ve heard that Netflix is showing “House of Cards,” a new TV series starring Kevin Spacey.
That is to say: While “House of Cards” is different in many ways from traditional TV, it’s also quite similar — you’ll see that kind of set-up up and down your TV guide.
Reality check: At the end of the first year, your mortgage balance has declined to just $196,498, according to the amortization calculator at Bankrate.com. In other words, the total equity you’ve built up is $250 shy of paying the closing costs on your loan.
What about those crazy lucrative tax deductions that you’ve heard about? As a homeowner, you get to deduct the cost of mortgage interest and property taxes.
If buying a bigger house (or even a house with a living room or a garage) is going to keep you in credit card debt, you've made a huge financial error, one that could cost you millions.
Rising house prices might be efficient (many bidders for a single item lead to higher prices), but when there aren't so many bidders, irrational sellers (see #2) don't lower their prices accordingly.
[Let me be really clear about what I wrote here, just in case you'd like to misinterpret it: When a prospect sees an ad or goes to an open house, she is about to interact with a broker.
The problem (as people who sell and fix and build houses understand) is that you just might fall in love with a house.
If your credit score is high, meaning that your credit history indicates that you’ve paid your credit card bills on time, haven’t “maxed out” your credit cards, etc., then lenders believe it’s a fairly good bet that you won’t have difficulty paying off your loan.
From a financial standpoint, it is almost always better to take the time to improve your credit health, and make yourself eligible for a better interest rate, than it is to apply for a loan with a credit score that will only make you eligible for a subprime loan.
Lenders typically look at your middle credit score (as opposed to the highest or the lowest), and you must provide all three of your credit scores (one from Equifax, one from Experian, and one from TransUnion), when applying for a loan.
Assuming you had the money to loan, you might then ask yourself, “Did he pay me back the last time he borrowed money? Did he pay me back the full amount? On time?” When you approach banks and lenders for a loan, they go through a similar analysis, but since they don’t know you personally, they use your credit history to determine whether you will be a responsible borrower.
Know Your Score Before You ApplyGet your free Credit Report Card and see what the banks will see before you apply.
You can check your credit score each month using Credit.com’s free Credit Report Card.
These agencies (Equifax, Experian, and TransUnion) gather information about your credit history, and, using a formula developed by Fair Isaac Corporation (FICO), each assigns you a credit score.
In some cases, they may have already been under contract and received an approval but the deal fell though for one reason or another- in that case, they can advertise ‘previously approved’ sale price or short sale but keep in mind that each NEW offer will be reviewed by the lender/asset manager and even if the offer price is the same as the previous approval, there could be additional fees that have incurred since that contract which will change the approval and ultimately, the sale price so, in short, the seller cannot in good faith advertise that a short sale is approved wholly until an approval is received on your offer.
We have since upped our offer a bit so that it gets represented and to offset any advantage that the other offer may have if it’s all cash (We are prequalified and putting a significant amount down.) Our buying agent has basically said there’ nothing she can do to create visability of our offer to the short sale negociator.
Ask your real estate agent if he or she has an addendum for the short sale purchase agreement that allows you to wait until you get the seller’s lender’s approval before you actually have to deposit the earnest money.
We recently looked at a home being sold as a short sale through Bank of America, only to find out that they have turned down nine offers, even offers that were full asking price.
The short sale price is no different than any listed price, you can offer what you want and most people bid lower than asking price.
When purchasing a short sale it’s not enough to find a “buyer’s agent.” It’s more important to find a short sale expert — someone that deals with them on a consistent basis and has a vast network of contacts within the various lender’s offices.
Before you buy short sale home you have to check the Public Records, hire an agent with Short Sale experience, qualify the property and seller for a Short Sale and understand Short Sale commissions and reserve the Right to Conduct Inspections.
This is a common misconception… the term ‘Short Sale’ refers to the purchase price being SHORT of the payoff… it has nothing to do with the process of the sale.
Second, since it now appears that the ‘seller and her agent’ had no authority to offer the house at the ‘short sale’ price, is this fraud? They lied about the ‘Notice of Default’ and misrepresented themselves as being the ‘sellers’, and having authorization, pre-approval, to sell at the listing price.
I have had a short sale house in a Florida country club community under contract since May 2013 Our realtor hired a short sale specialist to handle the transactions with the bank.
When a seller lists a home as a short sale, they are telling you that the list price is short of the actual payoff/amount owed and therefore the final sale price (& terms!) must be approved by their lienholder/s before the home can be sold and title can be transferred.
Next, assess your living situation: do you have the option to stay with friends or family for a fixed time while you raise the money you need? As average London rents hit £1,100 per month, according to LSL Property Services, would–be buyers are ploughing much of their hardearned cash into landlords’ pockets.
There are a number of special mortgage savings accounts that offer better terms for first–time buyers compared with normal savings accounts – although they are not always available.

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