How to Buy a Home
Buying a home is not just about pricing and negotiation. A great deal of the process has to do with how well–or how poorly–a buyer is prepared for making the purchase. This preparation does not need to take a great deal of time, and most of it can be done from the comfort of your current home or office, but it is important to spend some time getting ready before running off to look at specific homes. On this page you will find discussions related to preparing to buy a home as well as links to more articles and in-depth information.
Know your reasons for buying a home. Don’t simply make assumptions here–“everyone needs to own their own home,” “it is the best investment possible,” “I simply MUST have a new home” may be perfectly acceptable reasons if they fit your personal situation. First of all, it is a good idea to remember that a home is just that–a place where you can live. Yes, there can be some wonderful advantages to home ownership, including pride and accomplishment, potential tax advantages and the build-up of equity. But it is generally a mistake to attach too much importance to the advantages and not enough to what should be the primary reason: A home is a place where you live. By knowing precisely what your reasons are for buying a home, you will be much more likely to keep everything in clear focus.
Spend some time analyzing your budget and finances. Although there is much emotion involved with purchasing a home, the financial aspects should never be underestimated. There are a number of areas on this site that will assist you in getting a grip on your finances, your budget and ways to help in saving money.
Know exactly how much home you can comfortably afford. Listen to no one but the voice of your own budget. Your lender, your Real Estate Agent, and perhaps even your boss may have a vested interest in you paying as much–or more–than you should. There are thousands of home buyers who ignored this type of advice in recent years and find themselves either house poor or on the road to foreclosure. See the sections on prequalifying and preapproval and the chart to determine your qualifying ratios and affordability.
Familiarize yourself with the mortgage process. Learn about the different types of mortgages that are available and the sources for mortgage loans. Be aware of potential pitfalls and mistakes you may encounter during the mortgage process. See the section devoted to the entire mortgage process.
Distinguish between needs and wants. In 21st Century America, the words “want” and “need” are, for too many, interchangeable concepts. They aren’t–they have quite different meanings. Not understanding the difference and believing that a “want” is actually a “need” can be both expensive and find you purchasing a totally wrong type of home.In general, a need is something that is required. A want is something that is desired. See more discussion in the article devoted to distinguishing needs and wants.
Get familiarized with home inspections. A whole house inspection not only can prevent problems by discovering defects in a home, it can be a valuable source of information on home maintenance and repairs. For more information, see the sections on house inspections.