subject: Which Should Come Firstmoney Or Property To Buy? [print this page] Whether youre a first-time homebuyer or just looking to move to a bigger house, one of the major considerations in making the final choice among many homes for sale is affordability. Home buying is after all not based on a whim but on the buyers financial capability.
Take note that buying a home is not a one-time thing but entails many years of mortgage payment so it is very important to determine if you can afford to pay that much for a certain period of time before signing the purchase contract.
That said, proceeding to the next step inevitably leads to the question, which must come first, the money or the property to buy? The decision is as personal as the buyers current situation but to help you choose well, its recommended to list the pros and cons for each option.
If you choose to look for a property first before finding out if you can afford it, you must have a clear idea of what kind of home do you want or the type of neighborhood you would like to settle in. A pro for this option is that you have a wide range of choices. You can show up in many open house activities or even set up appointment with your real estate agent every weekend to personally check homes for sale.
One of the cons is you may be wasting your time looking at every house that catches your fancy only to find out later on that you cant afford it or doesnt qualify for that type of loan. Another con is after all the time that youve spent looking and is dead set on a particular property, there is a tendency that youd go over-budget and may need to look for additional financing. Another downside is that you may be able to pay for the mortgage for the next few years but may have to give up the property later on because it has put constraint on your overall budget.
If you choose to prepare the money (or at least get pre-qualified for a loan) first and stick to your budget, you can readily tick off properties that go beyond your means. This will save you time and instead focus more on the better properties available that your budget can afford. Another pro is that the seller will take your bid more seriously if you are pre-qualified. Also, most agents will want to know what price range to look at so the search will be focused on particular places that offer such home prices.
When you have an idea how much loan you are qualified for, you can also easily determine the downpayment that you can afford or the extra money that you need to prepare to support other expenses that the home purchase may incur. If you prepare the money first then stick to your budget, you will know how much you can put a bid in for and what kind of house you can logically live in.
The con for this option is that you need to compromise and settle for what your money can only afford. It may also take a longer time to make the final decision since you are just making do with your budget.
Whatever it is that you decide upon whether to look for homes for sale first or prepare the money and stick to it, homebuyers need to take time and consider how the mortgage will affect their overall budget for the long run. Maintenance, mortgage and other extra expenses are just some of the factors that you need to take into consideration and can also determine if you can afford to keep the house until its fully paid.
by: Carlos Montes
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