Buying a House
Buying a house is probably the most important decision any family ever makes. The process involves making a series of choices that will influence not only where you live, buy how you live and how much money you’ll have to live on at the end of the month. Whether you’re buying your first house, buying a bigger house, or considering the purchase of a vacation home, it’s important to consider the emotional and the financial implications of every decision you make along the way.
Where You Want to Live
You probably have a good idea about where you want to live—the state, the city, and the town, maybe even the neighborhood. Choosing your home’s location involves many considerations:
- Do you prefer an urban, suburban, or rural environment?
- Do you want to be close to family or work?
- Is public transportation easily accessible?
- Does the community have the stores and facilities you prefer?
- How are the local schools?
- Can you afford the property values, including taxes and insurance?
- Are the neighbors likely to be “your kind of people”?
How Much House is Affordable
Lower interest rates on mortgages and the growing availability of zero-down payment loans, and even negative equity, have made it possible for many families to buy homes they never could have afforded in the past. Unfortunately, some experts say this “creative financing” is also driving up real estate values, making families overextend themselves just to get a nice three-bedroom house in a relatively safe community.
Getting pre-qualified or pre-approved for a mortgage can help answer a big part of the financing question, because the mortgage lender will ask you a series of questions and use the information to determine how much money they’re willing to lend you. Among the things mortgage lenders consider are:
- Your credit history.
- Income and income prospects, since you’ll be paying off your mortgage for 15 to 30 years.
- Debt and other financial obligations. The more money you owe to to other creditors, the less money is left at the end of the month to pay a mortgage.
- The amount of a down payment. The more cash you put down on a house, the less money you need to borrow.
- Mortgage type, because lenders want you to be able to make monthly payments on time. They’ll tell you how much of a payment they think you can afford.
Feeling at Home in Your New House
The most important consideration in buying any house is to make sure you’re going to feel at home once you get there. If you’re struggling every month to pay the mortgage, or you’re all fighting for time in the only bathroom, you’re going to wish you could rewind the clock, do proper research, and make a better decision.
Take the time to find the right house at the right price; it’s worth the effort.
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