How Not to Buy a House You’ll Hate

Buying a house is a scary venture. It’s the most expensive thing you’ll ever do and if you don’t do it right, you’re likely to end up miserable. Though buying a house is a big deal, it doesn’t have to be overwhelming or complicated. Just follow a few simple guidelines, enlist the right helpers and you’re good.

The Guidelines:

#1 Before you even go browsing around neighborhoods, go see your lender. They’ll help you determine how much house you can afford. The rule of thumb is that your monthly mortgage payment, including principal, interest, real estate taxes and homeowners insurance, should not exceed 28 percent of your gross monthly income. Any lender who tries to push you into going for a bigger loan may not have your best interest in mind.

Once the dollar amount is worked out, get a pre-approval. This states that the lender ran a credit check and has approved you for a specified loan amount. This is much different from a pre-qualification, which simple says that lender thinks you’ll qualify, but hasn’t run anything official. Have a pre-approval gives you more leverage as a buyer.

#2 Don’t do business on a handshake. Get everything in writing—no verbal contracts on anything. That means if you ask for the fridge or anything else and the owner says, “sure” get it written into the contract. Same goes for contingencies, move-in, move-out dates and all.

#3 Even if you’ve got a plain vanilla 30-year fixed deal, be sure you understand everything that you are signing. Closings can look like an assembly line of paper with signatures furiously scribbled. Look before sign.

Your Team

Yes, it’s tempting to skip around the middle and avoid fees, but it’s also a lot more headache. In addition to your lender, your real estate agent is more than just a pretty face that unlocks doors. Put your realtor to work. Have them find out about the history of the house, any land issues, homeowners association info, and whatever else comes to your mind. Contact your insurance agent, find out about theft and damage claims in the area. Get a detailed copy of the inspectors report.

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