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Can I Buy A Home? 7 Answers to Common Homebuying Questions
1. Can I buy a home? In short, yes! This is a great market to find an affordable home while taking advantage of low mortgage rates. However, we understand that every situation is different, which is why we’ve compiled this FAQ for home buyers. 2. How much debt can I be in while applying for a mortgage? Your total debt to income ratio of ratio should be no more than 36 percent. Be sure to factor in other savings needs though, such as college funds and retirement. 3. What if I can’t put down 20% for a down payment on a house? It’s okay—there are many loans that don’t require such a large down payment, although some may require you to purchase private mortgage insurance, which protects the lender in case of a default on the loan. 4. Should I get pre-approved? Absoulutely. Getting preapproved means saving yourself a lot of grief in house-hunting, since you’ll know ahead of time exactly what you can and can’t afford. It will also put you in a better position to make an offer on the house you decide on. Preapproved is different from being prequalified, however. When you are prequalified, it’s based on only a cursory review of your finances. Preapproved is based off an in depth review, and is much more solid. 5. How do I know how much to bid on a home? Your bid should be based off recent sales in the neighborhood. Do some homework and look at the final sale prices of nearby homes. If several homes have sold 10% below the asking price, bid lower. But if you see homes sold above the original list price, bid competitively. 6. When is the best time to shop for a home? Around holidays and during the winter months seem to be the best times to negotiate for a lower price, though great deals are available year round if you look carefully. 7. What if I eventually want to sell the home I’m going to buy? Don’t sell too soon. You may end up losing money due to closing costs and a stalling market. However, simple things can ensure your property value stays good. Having a home near a good school district is a great example. Even if you don’t have children, living in a standout school district is a huge attractor for home buyers, which keeps your property value high. -Katarina Combs |
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