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8 Tips You Should Know Before Purchasing a Home

Written by  //  2020/07/10  //  Buying a Home  //  No comments

purchase home

Do you feel ready to buy a home? Buying a home is one of the biggest financial decisions you’ll ever make. That’s why it’s important to do all your research before the purchase. Take a look at these eight tips to consider before purchasing a house.

Tip One – Find a Realtor You Can Trust

Your choice of a real estate agent is extremely important in terms of how the transaction process will go. A good realtor finds out all your home-buying needs before starting the search. They will also understand your budget and what you absolutely must have in a house.

Tip Two – Don’t Buy For Today

It is also important to consider if thehouse you’re buying today will serve you tomorrow. In other words, don’t neglect your long-term plans. Consider questions like how long you plan to stay in your current job and whether you plan to get married or have kids. Long-term questions like this can influence the type of house you need now.

Tip Three – Buy a House You Can Afford

What you can actually afford might be different from what your bank says you can afford. Even if you’re approved for $600,000, it doesn’t necessarily mean that you can afford the payments on a loan of that size. You want to make sure you set a budget for a house you can comfortably afford, even if things get tight.

Tip Four – Look At Home Insurance

It’s a good idea to start shopping for home insurance in Montreal or your particular locale before you start looking seriously for a house. If you’ve never bought a home before, you have likely only carried renters insurance. You can check with your current insurance company first, but it is always advisable to compare rates with other insurers.

Tip Five – Don’t Forget Your Student Loan Debt

If you have student loan debt, it is important to remember that it can negatively affect your attempts to get a home loan. In 2015, there was a major FHA revision that now charges you with two percent of your outstanding loan debt regardless of whether it is deferred or not. If you get a non-FHA or conventional loan, then this amount is reduced to one percent.

Tip Six – Don’t Let the Home Mortgage Interest Tax Deduction Influence Your Budget

A common occurrence with first-time homebuyers is the temptation to buy more house than they can actually afford with the expectation that the mortgage interest deduction will make up for it. However, you can only use this deduction if you itemize Schedule A in your taxes. In truth, only about one-third of all taxpayers use itemized deductions. It’s still better for your finances to pay less interest and to get a house that you can comfortably afford.

Tip Seven – Get Pre-approved

Don’t even start searching for a house until you have a pre-approval letter in hand from your lender. There are several reasons for this. One, it shows your agent that you are serious, it tells you how much home you can afford, and it also enables you to move fast when you find one.

Tip Eight – Be Prepared For a Seller’s Market

In recent years, the real estate market has been biased towards sellers. This means that homes often go fast with multiple offers. That’s why it is important to have a budget, get pre-approved, know what you want and be prepared to move fast when you find a house that meets your criteria. Bidding wars are very common in hot markets.

You can go into buying a house with confidence when you are fully prepared with these tips.

image credit: twenty20.com

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