Your Best Investment
Owning your own home is the American dream. You've always heard that, but many people are still renting rather than taking the plunge and buying a home. The time for getting into the real estate market has never been better. Sure, you probably could have gotten into a home much cheaper five years ago, but as you've probably seen, the real estate market continues to increase in value all over the country while long-term, 30-year mortgage rates continue to hover below the 6 percent mark.
U.S. mortgage rates dropped in the past week. Freddie Mac believes the decline is a brief deviation from an overall upward trend in the future. The average mortgage rate on a 30-year fixed-rate mortgage fell to 5.80 percent in the last week, down from 5.89 percent the previous week. By the way, last year at this time, the rate on the 30-year, fixed-rate loan stood at 5.81 percent. So, it remains low, which means that housing continues to be very affordable.
Contact a mortgage company and find out about pre-qualification. It's always good to know what you can afford before you actually begin the search for your "dream house." Plus, when you find the right place, pre-qualification will strengthen your position. You'll know what you can spend and the seller will know you have the ability to meet the financial requirements.
You should also, especially during the purchase of your first home, find a real estate agent you trust. Ask your questions now. Don't wait until you are deep into the process. Find out who the agent will represent. Determine this before you find yourself with no representation. There are methods of "doing it yourself," but I wouldn't advise doing so until you are a bit more seasoned.
There are many questions that need to be answered before starting your search. Determine your "needs" and your "wants." Write them down. Some of these issues could disagree, so you'll want to make some critical decisions right from the start. While you might "need" a certain square footage to live comfortably, you may "want" a swimming pool. You may want to live in a certain part of town, but that could mean a long commute to work. Your time and budget must be the determining factors when dealing with your needs and your wants in the selection process.
And like anything else, you must educate yourself before taking the first step. Ask questions of friends and family members who have already purchased homes. Find out the specifics of what they learned while buying their homes. And remember the old adage, 'There's no such thing as a stupid question,' applies. The real estate agent is an expert. Ask all your questions before you make a move. Without the proper information, your dream house could become a nightmare.
I would highly recommend that you spend a couple hundred dollars and get an independent housing inspector to take a look at the home you're considering. Even a new home has problems. Once you buy it, the problems are yours. A certified housing inspector may find that the roof needs to be replaced or the furnace is about to stop working. The few hundred dollars you spend on an inspection now could save you thousands of dollars down the road.
Your house is the biggest investment you'll ever make. Owning your first home will give you a definite feeling of accomplishment, but be certain you learn as much as you can before you sign the papers at closing.
Originally published in the Outspoken e-newsletter.