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Deciding To Purchase a Home

For someone who has been renting for years or perhaps is moving out on their own for the first time, the idea of purchasing a home is both exhilarating and daunting. They wonder if it is the right decision and the right time. A home is a huge investment and not a decision to be taken lightly. Yet those who wait could miss out on historically low interest rates and the huge number of houses on the market to choose from.

Why Purchase a Home?

Owning oneís own home is a huge accomplishment as well as an investment. Rather than sending money to a landlord for a monthís stay in an apartment, a homeowner spends that same money to pay off their house. The difference is that a house is something they can keep and that will appreciate in value. In many locations, a mortgage payment is approximately the same dollar amount as rent for a comparable size living area.

Another reason to buy a house is that a homeowner can deduct the interest they pay on their mortgage on their taxes. You canít do that with rent! Moreover, first time homebuyers can also deduct real estate property taxes!

People can make money if they decide to sell their home, or they can build equity. When the mortgage is paid off, they wonít have any sort of home payments for the rest of the time they live in the house. Home ownership is a great way to build long-term wealth.

When someone gets a fixed-rate mortgage, they are guaranteeing that they will pay the same monthly rate for the next 30 years. They donít have to worry about rent hikes.

How Does One Purchase A Home?

Before making a deal on a new home, a buyer must be pre-approved by a bank or a mortgage broker. A pre-approval letter proves to a real estate agent that a buyer has the funds available to purchase a home, and tells them how much the buyer is qualified for. For example, if the pre-approval letter states that a buyer has a limit of $150,000, then the real estate agent will show them houses that cost $150,000 or less.

A buyer must find a real estate agent they are comfortable working with. He or she will show them houses in their desired areas and within their price range. There are also many real estate and house-listing websites that offer detailed descriptions, pictures, and even interactive tours of homes for sale. Homes can be searched for by price, number of bedrooms, number of bathrooms, square footage, and age.

Before closing a deal, a buyer should have a thorough home inspection performed on their potential home. If everything is satisfactory, the real estate agent submits a proposal to the seller. They can either approve the offer or decline it. If it is declined, the buyer can submit a revised proposal. If it is accepted, the sale can be finalized.

Why Should One Consider Buying Now?

There are a record number of homes on the market right now, so a buyer has more houses to choose from than usual. Also, itís a definite buyers market. Homes can be picked up for much less than they are worth. Some sellers are even throwing in incentives to get buyers interested. Buyers add home decorating allowances, pay closing costs, and even include furniture or other merchandise with the deal.

Mortgage rates are the lowest they have been since the 1950s. Financial experts donít expect them to stay this low for long. If a potential buyer waits another year to buy a home and the interest rates go up several points, they will have to pay several hundred dollars more each month for their house payment.

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