Shop Smart When Looking For a Home

September 23, 2010 | Leave a Comment

I just ran across this great article in USAA magazine and thought I would share…

To buy or not to buy? That is the question facing many families as they pursue the American dream. Buying a home offers the benefit of building equity, but renting might make more sense if it puts you closer to work or in a better part of town. If you’re trying to decide whether to rent or buy, consider whether you would own the house long enough to recoup closing costs and fees related to a purchase. If you know you’ll be moving in a year or two, it might be best to rent. Buying a home is potentially the biggest purchase you’ll make in your life so you don’t want to rush into it. If housing prices are declining or even rising too fast, it might not be the right time to buy.

If you decide to buy don’t overextend yourself. Homeownership creates a lot of expenses and a mortgage is only one of them. There is s big difference between what you qualify for and what you can really afford. Your monthly housing expenses should not exceed 28% of your gross income. And if you’re married you should be able to make the payment comfortably on only one spouse’s income.

Even before you buy a home you need to think about your next move and if the house would sell quickly if needed. You can’t assume that your home will sell quickly. Buyers should prepare for the possibility of being “underwater” on their mortgage-owing more on the house than it’s actually worth. Real estate is a long-term investment of at least 7 to 10 years. Be prepared to won as long as necessary to avoid a financial setback.



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