Don't Buy That House!

...Unless you know for sure that you are ready for home ownership. There are many things to consider when buying a home such as financing for a no doc loan or a mortgage for self employed individuals. To make the decision full proof, here is a simple list of some of the things you might consider:

1. Stay Put Or Don’t Buy.
If you can't commit to staying in one place for a few years, owning a home is probably not for you. With the transaction costs of buying and selling a home, you can lose money if you decide to sell too soon.

2. Shore Up Your Credit.
To get a mortgage, especially a self employed mortgage, you must make sure your credit history is clean. Get copies of your credit report before you start house hunting and fix any credit problems on the report.

3. Stay Low.
The rule of thumb is to buy a house that is approximately two-and-one-half times your annual salary. But always aim for a lower price to insure that you can afford your payments.

4. Don't Have 20 Percent To Put Down?
No problem, there are a variety of public and private lenders who offer low-interest mortgages that require a down payment as small as three percent of the purchase price. There are numerous 100% financing or low down payment options available.

5. Buy in a Nice Area.
This applies even if you don't have children. When it comes time to sell, strong school districts are a top priority for many home buyers. Being in an area with excellent schools will boost property value.

6. Get Professional Help.
The Internet gives buyers unprecedented access to home listings, but home buyers are better off using a professional agent. Look for an exclusive buyer agent who will have your interests at heart and help you during the bidding process.

7. Choose Carefully Between Points And Rate.
When picking a mortgage you may have the option to pay additional points, or a portion of the total interest at closing. This exchange makes for a lower interest rate. The lower interest rate will save you more in the long run.

8. Get The Capital First.
Save yourself the grief of looking at houses you can't afford. Do you need a no doc home equity loan or possibly a self employed mortgage? Get pre-approved. This will put you in a better position to make a serious offer when you find the right house. Pre-approval from a lender is based on your actual income, debt, and credit history. It is not to be confused with pre-qualification, which is based on a cursory review of your finances.

9. Do Your Research Before Bidding.
Before making your opening bid, consider sales trends of similar homes in the neighborhood for the last three months. If homes have recently sold at five percent less than the asking price, you should make a bid that's eight to ten percent lower than what the seller is asking.

10. All That Glitters Is Not Gold
Your lender will require a home appraisal, but that's just the bank's way of determining if the house is worth the price you've agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.