Never buy the first house you see. Always go househunting and look at different properties before making your decision.
This may feel like both an incredibly exciting and yet undeniably exhausting task. Very few people find the perfect home on the first try (and even if they did, they’d be wise to look around first). The reality is that you will have to check several properties and do a lot of driving. You may even find yourself rolling your eyes, growing frustrated, getting annoyed at yourself and the seller and even your real estate agent. As you go through this process you can even become overwhelmed and forget the goal. Instead, you give in and give up, and just get the next house, even if ultimately isn’t really what you were after. And then you feel buyer’s remorse.
What is buyer’s remorse? It a homebuyer’s nightmare. It’s moving into a house you paid hundreds of thousands of dollars for and realizing it’s the biggest mistake you’ve made. Since you can’t just walk out and sell it to some other person (it doesn’t make financial sense) you have to literally live with your decision.
You wouldn’t go through this is you stuck to your househunting and tried to do it as efficiently as possible Make a checklist of what you like such as locations, layouts, particular home styles, and those details or features you want such as a workshop or garden. You should also create a list of don’ts, or things you absolutely do not want. Once you have this list you are half way there.
Once you have a master list, don’t veer away from it. Don’t make an impulsive decision. You have to be both disciplined and practical. . If you find a house that has everything, but is on the edge of a polluted, noisy, high traffic road, don’t make an offer. Don’t be blinded! Remember your checklist! Another example is if you find a great home in a bad area. Forget it.
Honor your list religiously, stick to the guidelines you have carefully enumerated and you will be avoiding buyer’s remorse. Stray from it and you can’t blame anyone but yourself.
Are you thinking of buying your first home? Are you finally done with paying rent every month when you know that you can already afford to make the financial plunge and buy a house of your own? Well then welcome to the world of home buying!
There are some things that must be taken into consideration when buying your first hpise. One of the most important things to do is to acquire a copy of your credit report, which will inform you of your credit score. This is crucial when you are getting financing, and will be a big factor in how much money you can borrow (and on what terms).
If your credit score is over 640 you have an excellent credit report and can probably get bank financing. But if it is lower than that, or if your score puts you in the category of “sub prime” credit, then don’t waste time going to the traditional lenders. There really is no real point in approaching lenders that have very high requirements that you know you won’t be able to meet. And you may force the issue, but they may charge you too much for financing. Always shop around or approach a mortgage lender who can give you access to the different packages available.
But what are the chances of finding a home on less than perfect credit? A score of 550 will still make you eligible for a loan, but you will have to go to a non conventional lender. Anything that is lower than 550 may make your hunt a little harder but not impossible. You can still find a lender but it might just need a little bit more effort like a higher down payment or higher interest rates.
As for downpayments, depending on your credit you may have to pay about 3% down to as much as 15% down for those with poor scores. Your income will be a factor in this as well. You will also have to look at things like the equity you have available, what you can offer as collateral, and your financial responsibilities.
You’ve seen your “perfect” home, and you consider yourself lucky to have found it before somebody else. Your husband and children love it, you love it, the location is ideal.
But the price? Well, you say, the euphoria clouding your better judgment, “it’s just a little more than we wanted to spend.” By now you’re gushing about the home, the family has started planning who gets which room. Overnight you’ve gone from financially responsible to being desperate and ready to do almost anything to buy this perfect house!
But how do you do it? The next day you are worrying about how to get that “little more” without sending everyone to the poorhouse.Then your real estate agent mentions “alternative financing options” that will help you buy the home, and with very good monthly terms as well. Done, you say! But you don’t read the fine print. Just months later you’re struggling to manage with the fees. Oh no!
The moral of the story? “Never make a permanent decision based on a temporary emotion!” Always know your boundaries before even looking at homes! This plan should tell you how to behave with money instead of letting your emotions control your choices
Remember each time you look at a house that you will have to live with your decision for years. No amount of creative financing can magic up the money that you can’t afford to give to the payments. The best plan builds equity, saves for emergencies and puts boundaries for your next home purchase before you even start looking.
Once you’ve made a reckless decision on something as expensive as a home, you trade your peace of mind, your security, and possibly your future for a house. It happens each time someone puts emotions over sound financial principles. Remember that upon agreeing to a mortgage, the payments won’t stop till you’ve completed the contract or refinanced. Even Adjustable Rate Mortgage (ARM) or balloon mortgage may give you lower payments, they also translate into little or no equity for 5-10 years.
