Here are a few of the steps that you should take before closing on that home purchase.
Run the numbers first
A lot of people go house hunting with no idea as to the amount of home that they can afford. You need to figure out what your mortgage will be based on the purchase price of the home and the interest rate of the loan. Crunching these numbers can be an absolute nightmare. An E-mortgage calculator is a great tool to use to estimate the amount of your monthly payment and find out the affordability of a home. This will help you to avoid looking at homes out of your price range when house hunting.
Get an accurate appraisal
Before you make an offer for a home or secure financing, you should get an accurate appraisal to make sure that the home is worth what you are going to offer. In recent years, home prices have dropped a whole lot. A home that is worth $500,000 may have dropped all of the way to $300,000. You do not want to pay more for a home than it is actually worth. This will start you off with negative equity before you even purchase your home.
Search for distressed properties
Distressed properties get a bad reputation because of the name. You can get a sweetheart of a deal by buying a property from a homeowner in trouble. You should look for local auctions and tax sale properties in your area. You can find these in local newspapers and by driving around towns. Banks and mortgage lenders are desperate to unload these properties and they often go at a fraction of the price of other homes.
Buy a short sale
While short sales may take longer to close on than regular home purchases, you might be able to get a better deal on a short sale property. Since you are buying the property as-is some short sale properties are priced below their true market value. Short sale properties are owner occupied and much more likely to be in better shape than homes that have already been foreclosed on.
This is a featured post on behalf of Emortgage Calculator.