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Tips For Buying Your First Home

There isnít much thatís more exciting than buying your first home. A home is also the most expensive thing youíll ever purchase, so itís not a decision to jump into or you might end up with a home you donít love and a mortgage you canít afford. Here are a few tips for making the process less confusing, less stressful, and less expensive.

1. Donít move until youíre sure youíll be staying put. Buying a home just to up and sell it a few years later is very expensive. Donít start looking to make the purchase until you know youíll be staying for several years. This will help spread out the closing and moving costs over those years, making the whole endeavor less pricey.

2. Handle your finances before you start looking. Check your credit score- it should be in the 700s if you want to score the best interest rates. You need to be up-to-date on all your bills for at least one year before you start looking for a home. Save up at least 20% of the future homeís price as a down payment, plus an additional $5,000 for unexpected expenses.

3. Hire a real estate agent. Buying a home is complicated, and since you havenít done it before, itís useful to have a professional with you along the way. Ask your friends to recommend a buyerís agent they trust. Once you find an agent, get preapproved for a mortgage loan to ensure that you stay within your budget.

4. Figuring out your priorities. Make a list of non-negotiables, like how many rooms you absolutely need, or what kind of neighborhood you want. Then make a wish list- features of the home that would be nice, but arenít deal breakers. These two lists will help your realtor narrow down the number of homes he or she shows you.

5. Get an inspection before the sale is finalized. A home inspector will alert you to any problems with the home that arenít obvious, like roofing or foundation issues. This will prevent you from being locked into a home that will require expensive repairs immediately. You can even include a contingency in your offer that you will only purchase the home if it passes an inspection.

6. Beware the foreclosure. In todayís market, there are foreclosures in almost every neighborhood. While these can give you a great deal, you need to proceed with caution. The home can be severely damaged, and the bank might be selling it as it is. Buying a foreclosure can also take months, and there are investors who might be willing to make cash offers to the bank. This doesnít mean you should ignore foreclosures, but make sure they get a thorough inspection. Itís not a bad idea to hire a lawyer to help you through the process.

7. Donít forget the monetary extras. The expense of owning a home isnít just the mortgage payment. Youíll also be paying for insurance, taxes, utilities, and maintenance. Factor those into your budget when deciding how much home you can afford.