Here are some tips for home buyers to buy safely, sanely and securely in today's housing market...
- If you can't afford it, don't buy it.
- Don't jump into a home purchase blindly. Do your research, learn about the area and study all the available data
- Avoid creative financing. Buy properties with traditional terms and amortization periods and know what your mortgage payment will be each month for the entire mortgage term.
- Always put 20% down.
- Whatever the bank says you can afford, subtract 20%, and you'll more likely never be house poor.
- You're not just buying a house, you're buying a neighborhood.
- It's harder to get a mortgage because qualifications are more stringent these days. Keep great financial records and be patient throughout the process.
- Don't expect the market to bail you out. That means no overpaying for a house you can't really afford in hopes of market appreciation making up the difference.
- Less is more. A smaller, practical, easy-to-manage house is the new, big rambling mansion.
- Stay on top of your credit, and shoot for an excellent score.
- Plan to stay in you home at least 5 years. Think you'll need to sell before then? Keep renting until you know you can stay put for a while.
- Budget for all the ongoing costs of home ownership ~ not just the monthly mortgage payment. Be sure you have the funds for property taxes, insurance and even an emergency repair fund.
- If you are questioning your job security and ability to get a new job quickly don't buy yet.
The practical buyings tips are from an article found in Forbes '13 Rules Today's New Home Buyers Can Learn From The Past'.
It's possible to own a home and not feel handcuffed to the mortgage, but it does require careful saving and planning before signing on the dotted line!