If you are looking to buy a house, especially if you are a first time homeowner, there might be several doubts that might come up in your mind. Here is a compilation of some of the most common questions that home buyers have and the generic answers to them.
1. Why buy rather than rent a house?
Renting might seem like a less expensive option. This might be because the security deposit and expenses of packing and moving would be the only costs that you pay upfront. But buying a house is a long-term investment. Instead of the monthly rents, you would be paying loan amounts and this would end after you close your loan. Besides, you also get tax benefits, but you have to pay property taxes instead. If you come across a great value house in a self-sustained and safe neighborhood suitable for your family and convenient for your commute, buying would be a more economical option in the long run.
2. How much would be the down payment costs?
The down payment amount you would need would depend on
● The price of the house
● The lender
● Type of the loan you choose
● The loan tenure
● The mortgage terms you are bound by
On an average, the down payment cost would generally fall between 3%-5% of the price of purchase. Under certain special criteria, there might be some loans that require no down payment. Veterans can apply for VA loans and for properties bought in the rural areas, you can apply for a USDA loan. Both these come with a zero down payment option.
3. How do I find the best mortgage lender?
Make a list of the lenders who offer the best interest rates. Do enough research on them and gather some feedback from the previous customers. Work on maintaining a higher credit score. This can help you bargain better. Be clear about which matters more to you, the interest rates or the down payment costs, because both these are different with different lenders. Understand all the clauses as you would have many other expenses besides the down payment costs and the loan payments. Check if the lender also has all the types of loans that might best suit your need. Not all of them would offer USDA or VA loans.
4. How to finalize a house?
You might not always stumble upon the best house right on your first attempt. Check out the available options and weigh the plus and minus based on your requirements and expectations. Inspect the house yourself and if possible get a professional inspection done. This can help you understand the condition of the house. In several places, it is mandatory for the seller to fill out a form detailing the condition and the possible defects or repairs required in the house. Check if this form is available. Besides the condition of the house, also analyze the neighborhood, the amenities, water supply and drainage facilities and all other factors. Analyze the real estate trends in the area and choose a house that would be the best value for your investment.