Lender411.com Articles Home Purchase

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When the above title is used it's usually if not always questions to ask a Realtor, Loan Officer, Inspector, etc. All designed so that during the home buying process the buyer will become well informed and can feel good about the home purchase.

However what isn't usually asked are questions they (ie. Buyers/You) should ask themselves/yourself before buying a home. Knowing where you are financially, where you want to be, and how you want to end up should always be the bases on buying a home. The goal is to prevent yourself from living House Poor. Many of those who have big homes, nice cars etc are still struggling to make ends meet they just simply have nicer toys to play with.

So, ask yourself these questions before buying a home -

1. Why are you buying a home? Is this a desire or need?(I desire to have a Toyota FJ Cruiser, I need a Toyota Prius.)

2. How long might you live in the home? (Do you need a 30 yr fixed or will a 7/1 ARM work just fine?)

3. Do you know your current credit standing or does your credit report contain harmful information or errors?

4. Which is more important a low rate or low payment? (Should you choose interest only -higher rate/lower payment- or fixed - low rate/higher payment.)

5. In regards to rate are you open to paying points and origination if it meets your rate/payment objective? (Is buying down the rate worth the cost?)

6. In regards to the loan itself what is important?( To determine max purchase price, or target total closing cost, down payment? Is NO PMI a concern? Do you need to qualify for a new home prior to, or without the sale of your existing home?)

7. Do you plan on making principal reduction payments either monthly, quarterly, annually in addition to your schedule monthly payments?

7. In regards to finanical goals, will the purchase of the home help or hinder your goals? (Do you want to live on one or a fixed income? Save for yours or your child's education? Do you need to maximize your retirement savings or investment contributions?)

8. Do you know the total tax and insurance cost of the area of the home you wish to purchase?

9. Do you prefer to manage your own taxes and insurance or would an escrow acct be more appropriate? (Do you have the discipline to save for your taxes and insurance if an escorw acct isn't required?)

10. How will the purchase of the home affect your total debt structure? (Are you overbuying and keeping your debt to income just under required needs?)

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