Safety Tips for Buying a Home

I live in New York City, in the borough of Queens, and everyone I know – except me – is a renter. The only reason I’m not one is that I still live at home with my parents, albeit begrudgingly, for now until I can afford to move out. But when I do move out I’ll most likely be a renter too.

However, if you are one of the few lucky ones in this ever-dwindling economy who can still afford to buy an actual house, then there are things you should know before you buy so that you, your house, and your money remain intact.

First off, remember that real estate is a business. We all know that when the agents say “cozy” they really mean “small” and when they say “rustic” they really mean “rickety,” but those aren’t the only things to look out for. Know how much money, spendable money, you have at your disposal because everyone will try their hardest to convince you that, yes you can afford that duplex when in reality no you cannot.

Also, remember that the Internet is your friend. The World Wide Webiverse houses some of the best tools at your disposal from calculators that can estimate your mortgage, to live agents who can check your credit rating. If you do attempt the latter but aren’t happy with the results you may need a few months to clear up problems or old debts, which is why it’s always a good idea to start credit checking early. Find problems and fix them before the problems find you, or worse, are found for you.

In debt? Who isn’t! Since you will most likely need a mortgage to go with that new home you’re going to need to get rid of that shoddy credit history. Debt consolidators can scrunch all your bills into one lump sum to make it easier on your purse strings. Only a fool is afraid to ask for help.

Do the math. Real estate gurus say that buying a house will usually cost you about two and a half times what you make in a year. You will also probably need to put down 20% right off the bat. If these numbers don’t add up for you, don’t buy just yet. The worst thing to do is buy a house, get settled in, and just when you put your feet up on the coffee table you realize you’re going to be in the poor house. Don’t just expect the numbers to work themselves out.

Find out what the best gurus are saying. When it comes to housing, mortgages, and all-around managing of finances, listen to smart voices like Suze Orman. That woman knows her way around a stack of bills.

It’s also important to note that the house itself is not the only thing you need to take into consideration. Things like the inspection and the neighborhood are just as important. There’s no point in buying a brand new beautiful affordable home only to find that it’s full of toxic mold and next door to a crack den.

Be wary of prices that are too expensive or too cheap. Remember that age-old rule that seems to apply in every walk of life: if it seems too good to be true, it usually is.

All in all you must stay vigilant. The economic crisis now facing the country has its roots party entrenched in the housing crisis. Buyers are all too often too eager to pay for something they are told they can afford. First-time buyers are innocent and wide-eyed, and much too impressionable. Know what you can spend, and what you can’t. Take notes, and shop around. Home may be where the heart is, but it helps to have money.

By Andrea Nostramo
May 16, 2009
© Daype Inc.

image credit: Svilen Mushkatov