How to buy a home

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By Douglas Yu

Have you ever thought about buying a new house because you are tired of renting? Did you settle in a new city and get involved in a long-term relationship or a new job? Or do you just want to buy your own property to taste a sense of ownership? The list of reasons for buying a home goes on. Despite all the expenses of a new home — maintenance fees, property taxes, house repairs or gas for your lawnmower — you can actually save a considerable amount of money by following these four tips.

1. Can you guarantee you’ll stay put?
It comes down to your personal responsibility and how you weigh the pros and cons of buying a house. Usually you will pay more than you expect on capital gain taxes if you are in the house less than two years. So convince yourself that you will stay in the house you buy for at least two years. Otherwise, it may put you at risk of losing money.

It’s hard for those with financial difficulty to decide whether to rent or buy. A helpful link calculates the difference by factoring your current rent, home price and mortgage rate:

2. Are your finances stable enough to buy a house?
If you’re financially ready to buy a house, make sure to check your credit report. Good credit increases your chances of getting a home loan from the bank with a low interest rate. But be aware it doesn’t guarantee you can get a loan.

Credit scores, which reflect how good your credit is, are based on credit reports — the higher your credit score, the less you pay for your loan. Therefore, you will save money when you repair bad credit. The amount you pay to the bank each month for your house loan is called a mortgage payment and it comes with an interest rate.

Watch out for predatory lending, or you might become a victim. Over the past several years, many families in the United States suffered because of the growing incidence of abusive practices in the mortgage lending market. Predatory mortgage lending practices threaten families with foreclosure, according to U.S. Department of Housing and Urban Development.

3. You can afford it. Now, what’s next?
Try to locate an area that benefits you: good schools, nice surroundings and friendly neighbors. The area in which your home is located is sometimes a greater consideration than the home itself, since it impacts your home’s resale value directly.

A fixer-upper might not be a bad choice if its location could attract more people to move there. In addition, even if you are sure the area you chose is ideal, it’s always a good idea to see the house and surroundings in person. If you hire a real estate agent, it’s his or her job to find houses that meet your criteria and show you around.

4. Got the ideal home! Anything else to do?  
Keep in mind that it’s the house seller’s responsibility to give buyers a disclosure report, which details all physical problems and defects that the seller is aware of. You can file a lawsuit if you are sure that seller knows about problems but intentionally leaves them off the report.

Make an offer to the seller if you decide to buy a home. Your real estate agent can give you advice on how much to offer to the seller. Usually, you offer less than the seller asks through negotiation or simply pay the same amount, if the home’s worth that.

Signing a contract is one of the last things to do, which guarantees you are not competing with other buyers. You may pay $500 to $5,000, also called “earnest money,” to show that you are serious about buying the house.

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This post is also available in: Chinese

About Ling-Mei Wong 黃靈美

Editor of the Sampan, the only bilingual Chinese-English newspaper in New England 舢舨報紙總編輯。舢舨是全紐英倫唯一的中英雙語雙週報。
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