When thinking about buying a house, a little investigation can go a long way. These are 10 questions you should ask before purchasing a home.
- Are agents and brokers needed to help close the deal and offer advice? It’s commonly recommended, but not always necessary, to seek professional help for strategizing and negotiating.
- Is it affordable? Typically you don’t want to put more than 28% of your gross income toward monthly housing costs (mortgage principal, interest, taxes and homeowners insurance).
- Will the house fit your needs? Do you plan on having a family, expanding, remodeling, or are you looking for a home that has everything? Knowing what kind of house you are looking for will make it that much easier to narrow the search.
- Do you like the location? Moving again within the first few years of buying a house can increase the risk of losing money in the reselling process. (Money can be lost any¬way, but a quick turnaround increases the risk.)
- How long has the house been on the market? If it’s been there long, ask the realtor why; there may be a flaw in the house or it could simply be a bad housing market.
- What is the neighborhood like? Ask about the crime rate, proximity to health services, school quality, and what the traffic is like.
- How much should you offer? Base the offer on the sales trend of similar homes in the neighborhood. Consider this: if homes have sold at 5% less than asking price, make a bid that’s about 8% to 10% lower than what the seller is asking. Having the house appraised will also help you make this decision.
- What should the down payment be? Lenders usually require at least 20% of the home’s purchase price, but the lender may accept less with mortgage insurance.
- What condition is the house in? Make sure to have the home inspected by a professional. This way there won’t be any surprises after the purchase, such as dry rot or a leaky roof.
- What kind of mortgage will fit best? Shop around and compare interest rates, mortgage types (fixed or adjustable) and term lengths.
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