Tips for First-Time and Second-Round Buyers of Homes

We have all heard about the reasons for buying homes even in the midst of the Great Recession that continues its grip on the United States. The high rate of home foreclosures has resulted in falling values that, when coupled with the low interest rates on mortgages, made the real estate market a buyer's market.rnBut there are risks to buying homes in the economic downturn so much so that it will be foolhardy to rush into a real estate purchase for any reason. Extreme care and caution are necessary to make a good deal last for the next 20-30 years of the house's lifetime or the mortgage's term. Keep these buyers' tips in mind.rnFirst-Time BuyersrnThe main considerations for first-time buyers are always the ability to pay the total purchase costs followed by the capability to pay the mortgage and other maintenance expenses on the house. If your financial stability in the next 10 years is in doubt, we suggest renting an apartment instead of becoming a homeowner.rnKeep in mind that the purchase costs for a house will not stop at the listed price for cash purchases or the down payment for mortgaged homes. You must also take into account additional expenditures to be incurred before the deed of sale is transferred in your name. We can mention closing fees, bank charges and professional commissions that can inflate the listed price by as much as 10-20 percent!rnThen, you must also take into account the monthly mortgage payments in addition to the maintenance costs like taxes, utilities and repairs on your new home. If these expected expenses amount to more than 35 percent of your expected income, you may want to think twice about the purchase. You must pay for other living expenses, after all.rnWe also suggest asking for professional help from real estate agents and lawyers. The complexities of a home purchase can be too much for an average individual to handle. Besides, the transaction will go smoother than if you decided to handle it on your own.rnAnd of course, read the fine print of the contract. You want to avoid consigning your life to real estate hell just because you failed to understand the terms and provisions of the sale including the mortgage contract from the bank.rnSecond-Round BuyersrnWhen we say second-round buyers, we are referring to existing homeowners who want to sell their old home and then buy another one. You can still profit on the sale of your old home despite the buyers' market. Consider this: After selling your house, you will then become a buyer and, thus, turn the tables, so to speak.rnWhen buying your new home, be sure to adopt the abovementioned tips for first-time buyers. But you have another ace up your sleeves - the proceeds from the sale of your old home can be used to beef up the down payment on your new home! You will then be able to enjoy lesser mortgage interest rates and lower monthly amortizations.rnIn conclusion, the economic recession has made many individuals unwilling to take the risk of homeownership. We suggest taking action now, if possible, for tomorrow the housing bust may soon be finished and you may be able to profit from your purchase today.