Buying A House 101
Just like buying everything in life, you should create your house buying checklist. With increasing rental market rate, one should consider buying a home as an investment. What should you put on your check list before buying a house?
Calculate how much you can afford
Always try to put 20% minimum down payment so you will not have to pay PMI (Private Mortgage Insurance) on your monthly mortgage payment. Also calculate extra 7% for any additional cost that might incurred during closing. Well, normally you can negotiate this. But when there are multiple offers, your offer will not be strong enough if you ask seller to cover the closing cost. Then, of course, don’t forget to calculate how much monthly payment that you can afford,mortgage payment, property taxes and homeowners’ insurance.
Qualifying and getting a loan
If you have pre-approval letter,that would help a lot in the buying process. It gives you confident on how much you can afford also seller is more confident that you can actually afford the price you offer.
Search on locations of the house that you would like to purchase.
You can start by browsing on ziprealty, realtor.com, redfin, trulia or any other online home selling sites. By browsing, you can see what the average price of the properties and see what you can get within your price range. Once you see what you like, visit the neighborhood at night and check it out.
Finding a realtor
Once you figure out which area you would like to see, contacting a local realtor would be helpful. He/she would be more understand about the neighborhood and may have more listings in his/her MLS system within the area, possibly the one that is not on the market yet.
Check the property tax data on county’s website
Property tax data are public record. When you see a house you like online, most of the time you can find its tax data online and can estimate what your tax amount would be after you purchase.
Check out the school district
A good website to check the school ranking is greatschools.org. A neighborhood that has good school district, normally is a good neighborhood and home prices tend to be higher. But this type of area has more demand, so in case you need to move and sell it one day, you have better chance to make profit on your investment. If you’re thinking to rent it out, your rental price would be higher and automatically pre-screen your possible renter who can afford to live in it. So whether you have kids/plan to have kids or not, it is equally important to check out the school district.
Once you get all these ready on your checklist, you are ready to search and make a commitment to be a homeowner. Most importantly, buying a home is a fun process. Enjoy and learn, talk to other people to gain more knowledge, whether its about the neighborhood, the school district or anything. Good luck!