In the endless debate that is Renting versus Buying your new home, those who opted to have their own property title for themselves could make a lot of case about their decision. And, why not? Isn't it always better that you spend a significant slice out of your monthly income pie paying for the mortgage of a house you can call your own, rather than spending it on a rent for the benefit of some mingy landlord.
Credit scores getting better, receiving a pay raise, and mortgage rates hitting rock bottom -- these are just some of the reasons you should be buying your new house. But there are some serious road bumps on your way to be a happy camper if you aren't judicious enough to know the pitfalls and the red flags. Here are some tips you should ponder on:
Do Not Surprise Yourself with the Hidden Costs
Sure you can afford the monthly mortgage with your steady income. But you can still get cash-strapped because of some hidden costs you were too naïve to consider beforehand, according to U.S. News Money. On top of the downpayment and mortgages, there are other fees which are not included in the sale. These are called the closing costs that may include "fees you pay during application, home inspection, loan origination, appraisal and survey, and that for an attorney". Click here on how to save on closing costs.
Do Not Get Smitten By What Is Superficial
Brian Kearney, a Boston-based contractor and owner of NeponsetValley Construction, via Bankrate.com, advises not to simply fall for the aesthetics part of the property but make sure it's structurally sound. Bradley B. Cruickshank of Cruickshank Remodeling in Atlanta recommends checking on the basement where you can get an idea of the type of construction, the quality of materials, and the craftsmanship of the workers. Tyson Kunz, of TTK Home in Tomball, Texas, says you should check out on the foundation of the house. You can look for nearby trees whose large roots may wreak havoc to the foundations, or check for cracks on the flooring and on the drywall near the corners.
Choose the Right Neighborhood
RealtyTimes recommends doing a research on the neighborhood as well, and not just the house itself. After all, it won't matter if you could have the best house in the world if the surrounding area is not safe and conducive to raising children. You can visit the neighborhood during the day and at night beforehand. Look for red flags such as rusty vehicles and vacant lots, tall grass, rowdy late-night parties, and lots of foreclosed homes.
Avoid the Costly Eventual Renovating Costs
It is very important to have the property inspected thoroughly before making the purchase. That is why it's also wise to invest on a credible real estate agent. Check faulty electrical wirings and plumbing fixtures, lack of insulation in the walls or ceilings, and rotten framing, the RealtyTimes notes.
Know Your Spending Power
It is important that you make sure your monthly income will suffice to pay for the monthly dues of the mortgage. Never think that just because you have assets, you won't have any problems even if you're financially unstable, says WikiHow. You should be able to pay with your regular income. Never be an impulsive buyer when it comes to long term investments such as buying a new house. Know your income earning ability and spending limit.
Consider The Resale Value of your Home
It's not unwise to think of selling your house when you are just about to purchase one. U.S. News Money says that you must consider the listing value of the house on the market because you never know when you have to move to a new place in the future which is not a far-off possibility.
