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Before you start, you need to check up on your credit rating. If you have any discrepancies on your record or delinquent payments, you need to take care of them before looking into a house. Your credit history will determine the interest rate you get, and just a little work could end up saving you thousands in the long run.
Step 1: Finance
You need to get a pre-approved loan before shopping so you know what you can afford. The zero down loans are now in the past: you will need to pay at least 20% of the house's appraised value, unless you qualify for a VA or HUD loan.
Appraised value is set by a professional appraiser, not the sale price of the home: the down payment you make may actually be a higher or lower percentage of the total home cost. You will also need money on hand to cover closing costs, which can be as much as 8% of the total price.
Applying to several banks for loans will not hurt your credit score, as long as you apply within a two-week period.
Step 2: Shopping
I could write a lot about house shopping, but there are really two things you need to remember:
Maintenance and utility costs will be a major part of the house. Always take into consideration the amount of insulation a house has and its general energy efficiency.
People are stupid. You may be able to get a good deal on a house because the rooms are an awful color, even though the most inept D.I.Y.er could fix this with a can of paint. Look at a house not as it is, but as what it can be.
Step 3: Bidding
You can now make a bid. If the owner doesn't like the offer, they may make a counter-bid. This can go on until either you agree on a price, or someone else makes a better offer.
 Posted 5408 day ago
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