If purchasing a home this year is on your New Year’s Resolution list, or you are even considering it, these six tips will help keep you stay on track. With thanks to Steven M. DiGregorio, president of Compass Asset Management Group, here is a top priority tip list to help you buy a home in 2013.
1. “In these uncertain times of fraud, start by give yourself a credit check up,” advises Steve. “Make sure your credit history is as clean as possible.” If you start now, you can make great progress quickly which will enable you to potentially get a better mortgage with a lower down payment.
2. Buy what is best for you. Take care not to buy a house that’s too small because it seems more affordable, or too big because it looks amazing. Buy what works for you. Most people live in a house for approximately seven years so think about what life will be like in the next seven years and use that to help you plan.
3. Buy a house you can really afford. Steven says. The rule of thumb is that you can buy a house that runs about two-and-one-half times your annual salary.
Plan to use only 30-35 percent of your after tax income to pay for mortgage and taxes. You can use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.
4. Don’t try to time the market. Many people who want to buy a house choose to wait, hoping that prices will go down. They might go down but they might also go up. And in the meantime, your dream house might be purchased by someone else … AND you’re still throwing money away by paying rent. If you’re ready to buy and you’re pre-approved, find a good home and buy it. Timing the market doesn’t make sense.
5. Get professional help. Sometimes the price of hiring a professional may seem high compared to completing the home buying transaction yourself, but you’ll likely avoid huge pitfalls if you do get professional guidance. Real estate agents, home inspectors and attorneys are essential components of the process and they are an investment into a safer, smoother purchase. A mortgage broker can help you find a great rate, but the best part is, they are paid by the lender not you.
6. Choose carefully between points and rate. 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. If you stay in the house for a long time (three to five years or more), it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.
Don’t hesitate to give me a call if you have any questions about buying. Weichert has an excellent financial department and it costs nothing for you to come over and pick his brain. If you need help I am just a call or click away! Go to my website at: http://www.NormaSellsNJHomes.com