A Do-It-Yourself Guide to Buying a Home
Posted on May 21, 2009 in the Mortgages category
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Buying a home can be both an exciting a stressful time. Many people consider doing it themselves in an effort to save money. Whether you are a first time home buyer, or looking for another home, there are many factors that need to be taken into consideration, especially if you are going to buy it yourself without the help of a real estate agent. Are you ready for the responsibilities of homeownership?
Purchasing a home is a major life investment. Before you sign the contract, make sure you can meet the responsibilities that come with homeownership. Make sure that you are financially ready for such a big purchase. Easy to use mortgage calculators that can be found online will allow you to determine if you can afford a home. It will also determine how much you can afford. Mortgage payments include the amount borrowed, the interest, and usually the property taxes. To check to see what you can afford, calculate your net worth, determine your monthly expenses, and your current monthly debts. Make sure you allow enough for unexpected costs such as any repairs you may have to do.
Can you afford the Up-Front Costs?
There are many up-front costs associated with buying a home. It is important to know all of the costs involved so you can determine if you can afford it. These costs include: mortgage loan insurance premium, appraisal fee, down payment, home inspection fee, land registration fees, prepaid property taxes, utility bills such as getting the oil tank filled, homeowners insurance, survey costs, water tests, title insurance fee, and legal fees.
What are your housing needs?
You should know what type of home will suit your needs. You should consider the size of the home such as number of bedrooms and bathrooms, extra features such as walk in closets, a large backyard, a garage…etc. Will the home accommodate a growing family such as more children? Or, is it a retirement home?
Where do you want to live?
You have to decide where you want to put down your roots. Do you want to live in a rural community or urban atmosphere? Location to schools, parks, your workplace, and shopping centers must also be considered. Determine the market value of comparable homes in the neighborhood before making an offer.
Do you want a newly constructed home or resale home?
There are advantages to each type of home. Newly constructed homes are more energy efficient, modern designed, wired for todays technology, require less maintenance, and often come with building warranties. Older homes, or resale homes, tend to have more charm, the taxes will be lower, and they are usually located in established areas near amenities, schools, shopping centers…etc.
What Professionals should you hire?
There are a number of professional services you will need before you make a purchase. This can include real estate agent, mortgage broker, lender (either a bank or other institution such as a trust company or Ontario credit union) attorney, home inspector, insurance broker, home appraiser, and surveyor.
Do you understand the purchase agreement?
Before you sign the contract, read through the entire contract form. If there is anything that you do not understand, consult with a lawyer or real estate broker. Make sure you have mortgage approval before signing the agreement.
Does you contract include an out?
When you sign the purchase agreement, make sure you include terms and conditions that will allow you to cancel the contract. Conditions can depend on approval of inspections and financing.
If you buy a home without a real estate agent, you may save the commission costs if you negotiate the price. Because of the many factors involved with buying a home, enlisting the services of a real estate agent can reduce a lot of stress. No matter what choice you make, it is important to take the time to know all that is involved with buying a home.
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With a guide serving things got easier!
Thanks for breaking it up for me!