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Home Buying FAQ
Buying a home is a big step in life and a serious commitment. For this reason, you need to know all you can to ensure you buy a great home and not something you will regret. After all, this will be the place where you live, eat, and visit with family and friends. This is your safe haven and retreat away from the world. Being a homeowner is a wonderful experience as long as you follow some basic guidelines.

One of the very first things you will need is to determine how much house you can afford. Typically, most buyers choose homes that cost from 1.5 to 2.5 times their annual income. For example, if you had an annual income of $40,000, you would look at homes that cost from $60,000 to $100,000. Remember that this is just a guideline since other factors would come into play. For instance, you might live in a geographical area where the average home costs more than your highest dollar amount. In this case, you may be required to buy above this guideline. Regardless, what you are trying is not to allow your monthly mortgage payment to be higher than 29% of your gross monthly income.

Another important consideration is whether to use a real estate agent or not. You could buy a home on your own or through a "93For Sale by Owner" (FSBO) but if, this is your first home, you definitely would do better with an agent. Although you might cringe at the thought of paying the high commission rates, for the services you get in exchange, it will be worth it. A qualified real estate agent will do a lot of the work for you, ultimately saving you time, money, and unnecessary headaches.

To make sure you are getting a good home for the money, you will need to do heavy comparison on homes, the current mortgage market, neighborhoods, and even lenders. Make phone calls, ask friends and family for references, and do not be afraid to look around before you settle in on one thing. When it comes to programs, you will find several great options, especially if this is your first home. If you want to determine the government programs available where you live, contact your local housing authority.

In addition to having money for your down payment, you will also need to have money saved for closing. This figure will depend on a number of things but in general, the fees to be covered will include title search, credit check, settlement costs, and so on. The amount you pay in closing will also be dependant on the number of points you will be paying.

After searching for the perfect home, when you find one you want to make an offer on, you need to confer with your real estate agent on the proper amount. Typically, you want to start lower than the listed price but not so low that the seller does not take you seriously. Put yourself in a position of being considered as a serious buyer while still having some room to get a bargain. Finally, the most important thing you can do for yourself is to pya for a professional inspection by a licensed professional engineer. The cost of an inspection will range from $200 to $500 but worth every cent in the end.

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