Knowing what you’re setting yourself up for will help you get better prepared, avoid costly mistakes, find better deals and, most of all, get the best assistance.
Being prepared will assure that you ask the right questions that will in turn demonstrate you did your homework and, by itself get respect and quality services.
Be careful what you wish for as you simply might get it!
A lot of homeowners have been taken advantage of by unscrupulous mortgage brokers who persuaded them they could spend more and buy the house they really wished for; the house of their dreams… to find out a little later, or in late 2007 if you live in North America, that their budget could not stretch enough to follow the rise of interest rates.
Mortgage brokers, just like loan officers by the way, are like sales people: they have quotas to fill and do receive a commission on the loan they are getting you to sign.
I am hoping this does give you perspective if and when you are offered a loan for a higher interest rate or for more than you think you can afford since it’s your family’s home you’re risking here. It just might be well worth it to wait a bit and fix whatever problem, whether it be your credit score, your credit ratio or your work history, so you could obtain safer and cheaper financing opportunities.
I hope I don’t offend anyone when I say you shouldn’t trust loan officers any more or less than any other sales people: the majority of them are good, honest and hard working individuals but they cannot humanly be 100 of the profit (the difference between purchasing cost including cost of renovations and selling price) if you obey to some guidelines like not doing it more often than once every 1 or 2 years according to where you live and, in certain places, reinvest your profits in buying a more costly property.
Selecting your home.
Usually, this is the second time when you should keep a cool head.
Questions you should ask yourself here are:
is this going to be your house for the next 50 years or is this a stepping stone towards your dream home?
how is the commute between your house and your work?
is this house going to fit your family’s needs in 2, 5, 10 years?
can this house be improved cosmetically with minimum effort and would this considerably affect its resale value?
is the neighbourhood’s reputation going to change in a foreseeable future?
where are the pharmacy, supermarket, bank, video club, restaurants?
is there public transit available?
will the flooring cause your kids to have allergies?
how simply can this house be taken care of?
the most crucial question of all: do you actually like this house?
Bonus question: will this house satisfy your entertaining needs?
You should like it if you don’t desire to grow to hate it.
Purchasing a house does require your whole family to make some sacrifices. You have to like your house, at the least a little, if you do not want to resent each payment.
Watch home makeovers or hire a professionnal to aid you make your house desirable to your senses as this can usually be done for bit of money and make a huge difference in how you fell every time you pass your front door.
You can’t know it all nor should you have to.
Surround yourself with trustworthy advisers such as an accountant, a lawyer and a real estate agent who has a reputation of integrity and good negociation skills.
Choose advisors you’re comfortable with since you’ll need to share some intimate information with them.
And lastly.
Have some fun as this should, if done right and with good advisors, be a very enjoyable process!
Good luck with your purchase.
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