Buying Your First Home – Watch Out!
If you are buying your first home there are people who will help you get into all types of trouble. Well mostly it is one type of trouble: financial. Here are some examples.
Watch Out For Real Estate Agents
You might think that real estate agents would love firsttime home buyers since they can influence them and make a sale more easily. In reality though many people are very hesitant to make a decision when they buy their first home. It will be the single biggest purchase they have made in their lives after all so they want to take their time and see a lot of houses. Meanwhile the agent just wants a sale.
Don’t be pushed to make a fast decision. It may be true that a particular house is “not going to last long” or it may just be something an agent says. Either way their are other homes and you need time to get a feel for what is available and at what prices. This education is crucial and comes primarily from looking at a lot of homes.
The agent is not necessarily looking out for your best interest by the way. Unless you hired him to represent you he works for the seller and is even obligated to pass on any relevant comments you make like “we can go higher on the offer if necessary.” Keep quiet and remember that the agent is a sales person whose primary concern is to sell something.
Watch Out For Mortgage Lenders
When you are buying you first home you are also buying your first mortgage loan. Lenders will be so helpful. For example they will help you afford a loan that is too large by offering you a variablerate loan with a low teaser rate. Of course they won’t help the hundreds of thousands of families that are now facing foreclosure because those payments went up when the teaser rate period was over.
Variable rate interest only and even reverseamortization loans where you owe more each year have all been “helpfully” pushed on firsttime buyers who are trying to buy more than they can afford. You are told that buying a home is the best thing you can do. Sometimes this is true but it never is if you can’t hold onto that home. If you really can’t afford a home a smaller home with a smaller mortgage loan is better and if you can’t afford that renting is actually the best thing you can do.
Look at the worstcase scenario when considering a loan. For example if you are considering a variable rate loan ask what the payment will be if interest rates go up 5 years later. Will you be able to comfortably afford that? The banker may helpfully point out that the rate is capped at a 2 rise per year but that just means the day of reckoning is postponed a little. In three years you could be paying almost 6000 more per year on that 200000 loan.
Watch Out For Family And Friends
The best intentions of friends and family can get you into trouble. When you are buying your first home you will get advice. Sometimes it will be good advice. Other times it will be a friend trying to get you to move to his neighborhood the one you can’t afford. Family too can push you to buy before you are ready or spend too much. They don’t always know what is best for you so do your own thinking buy what YOU need and buy a home you can afford.
About the writer:nbsp;nbsp;Copyright Steve Gillman. To see a photo of the house we bought for 17500 get a free ebook on how to buy Cheap Homes and more visit: http://www.HousesUnderFiftyThousand.com
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