Before
purchasing a home, potential buyers must
consider several key factors – most importantly
the cost. If a buyer is pre-qualified for a
mortgage, he or she can save time by limiting
the search to only those properties within the
designated price range. Secondly, a down payment
of 20 percent is necessary to avoid expensive
private mortgage insurance. However, if a large
down payment is out of the question, a second
mortgage could boost the borrowers' contribution
to 20 percent. Buyers also should request an
estimate of the closing costs and compare lender
estimates to find the best deal.
It is extremely
important to make timely monthly mortgage
payments to avoid credit damage or foreclosure.
Buyers who are worried about affording a
particular home probably should not buy it. In
addition, they should consider setting money
aside for home maintenance and emergency repairs
as soon as possible.
To ensure appreciation,
homebuyers must choose a good neighborhood in a
good school district, as well as pay close
attention to local economic trends. Most
people's wealth is in their home, and equity is
one of the greatest rewards of homeownership.
Over time, many homeowners find their equity is
enough to pay their children's college tuition,
or enough to sell the house and buy a better
one.
