Buying a house in USA

Overview

Buying either your first house or the 10th, it is an extremely personal decision and an emotional one. Many people living in the country want to achieve the "American Dream" which includes a house in suburbia and a car among other things.

There are multiple Own Vs Rent calculators available which can get your started. Buy Vs Rent . Once you made the key decision between buying and renting a house, you can head over to get an "Apartment Guide" or your nearest bank to information.

Buying a house

Before the real estate market crashed (starting in 2007), on average, people move to new homes about every seven years. The first step you should take, is to figure out how much you can afford to spend on a new home. If you haven't set up a budget that shows you how much you're spending on everyday things, now is the time to do it.

A good budget will help guide you to the right price range of homes as well as prevent you from spending more than you should on your house. You probably don't want to have to change your lifestyle in order to buy a more expensive home.

By having a handle on your personal budget, you can compare your own numbers with what the bank is willing to lend you to come up with a very manageable mortgage payment that will let you continue the same lifestyle you currently have.

Getting Pre-approved for a Mortgage

You can get pre-qualified and/or pre-approved. Getting pre-qualified just means that you have told a lender your income level and your debt and credit information, and the lender has estimated what you can afford.

Pre-approval, means you are much closer to the actual loan and that the lender has done the work of pulling your credit report, checking your debt-to-income ratio, and has done an in-depth analysis of your financial situation.

In the house-buying process, the benefit of being pre-qualified or pre-approved is to have the added comfort of knowing what you can afford, the seller may also accept your offer over another if you are pre-approved and the other party is not. The seller often doesn't want to take the chance of losing the sale, even if your pre-approved offer is slightly lower.

Costs

In addition to the mortgage, you will also have to add property tax and insurance to your monthly payment. If you do not make at least a 20% down payment, you will have to add Private Mortgage Insurance. Additionally there will be closing costs.

All of these additional costs add up, so make sure you are comfortable with the total amount of your monthly payment and know how much you can put into a down payment before you begin your search.

Location, Location, Location

Location, location, location. It is true, location is very important, even if you do not plan to be there many years. What to look for in the location of your home may also tie in with the list of priorities. For example: Do you want your kids to be able to walk to school, or is riding the bus okay?

The other thing to keep in mind about location is that your preferences will change over the years. What's important to you right now may not be so important in 10 years and vice versa. For example, having no kids might make you ignore looking into the school district the home is in. Later on, if you do have kids, that will be an important consideration and can also mean moving from a home you love in order for your children to attend better schools.

When you begin to search for your home you have three choices:

• You can go it alone and do all of the legwork of finding homes by looking in the newspaper, searching online, or looking for Sale by owners.

• You can call a real estate agent and ask them to show you homes.

• Or, you can sign a contract with a buyer's agent.

Making an offer

Once you find the dream house, it is time to make the offer. There are several steps you need to take and contracts that need to be drawn up.

The first thing that happens is your official offer. When you make the offer, you have to keep in mind that it could easily become a legally binding contract if the seller accepts it. Because of this, you need to make sure the offer includes all of the contingencies, concessions, and other details you need it to cover.

One of the main contingencies is Inspection. Since the entire deal could be riding on the professional inspection of the home, do not cut corners when it comes to the house inspection. Even with new houses, there can be hidden problems that only a professional inspector may find. These inspections cost anywhere from $200-$500.

Closing

Assuming the inspection turns out well and the financing has gone through successfully. Your attorney will do due diligence, which includes a title search to determine if the seller does indeed hold the title to the property and there are no other legal claims against it.

It is at the closing you will be signing the biggest stack of paper you have ever come across after which the title to the property will be transferred to your name, your homeowners' insurance begins coverage of the property and you are officially committed to your mortgage.

Relevant Links

Should I buy a house when my i485 is pending?

Can Green Card improve the housing market of the U.S?

Million Dollar Question - To buy or not to buy?

Further Info and Discussions

Buying a house

Long term prospects of buying a home