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Home Buying

April 03, 2008  |  Difficulty: Easy

Path to mortage
You’ve been renting for a while and now it is time to move up. This is the right place to start your eventful journey. Take heed of the helpful hints and information. What you read will help you to navigate through the home buying process.

Relax! Don’t be intimidated. Settle down and get ready to learn.

You may wonder what is the big difference between buying and renting. The major difference is the investment. Your home is yours and you can use it to subtract the interest from your mortgage loan away from your federal income taxes, as well as your state taxes. This can end up saving you a good deal of money each year. You will also be able to deduct property taxes that you will pay for when you own your home. Equity is also accumulated as you pay off your mortgage loan. You get none of that with rent. You send your monthly amount and it is gone. There is no long-term financial benefit to you.

So, home buying seems to be a leg up from renting. The good thing about the home buying process is that there are a lot of laws that protect you as a buyer from discrimination, needless expenses and scams. To further avoid any pitfall, get to know your rights. A good website to visit is the U.S. department of Housing and Urban Development (HUD). The website will give you tons of information about laws that protect homebuyers, and will also give you helpful tips that you can put to use.

What do new homebuyers worry about the most? Money, of course! And this is very much understandable; this will probably be the biggest purchase of a person’s lifetime. Finding a good lender is very important. If you have a great credit score, you don’t have much to be concerned about. Lenders will be working to get your business.

You absolutely must get pre-approved for a mortgage loan before you take on any other task. Well, you technically don’t have to, but there is no use house shopping without a proper budget. So, this is just a smart rule you should follow. How sad it would be if you find the perfect house, but are approved for an amount that won’t cover the purchase. When you are pre-approved, use a mortgage calculator to see how much your monthly payments will be. You don’t want a large mortgage that will eat away at most of your monthly income.

Interest rates are a part of home buying. You can start with a low interest rate, but then it can rise. There is no way of knowing how high rates will go, so you should plan for the terrible rates. If you purchase a house that is well within your monthly budget, you shouldn’t have too much to be concerned about, especially if your income stays the same or increases.

Is the thought of making a down payment making you feel down? Don’t worry; there is a section that talks about grants that are available for individuals who are buying a home for the first time. Still don’t understand the real difference between buying and renting, there is a section about that as well. Get all the info you can, because once you buy it is harder to get up and move. Make a choice that will keep you happy in the long run.

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