Five Things You Should Know Before Buying a House

To put it mildly, the real estate market is in a slump these days. Buyers looking for a new home can get great deals if they know what to look for and how to ask the right questions. Here are five things you should know before signing on the dotted line.

1. Can you get approved for a sound mortgage?
The mortgage game has taken some huge hits lately, and the casualties are homeowners who had to settle for sub-prime mortgages. These poor souls are at risk of losing their homes because of unscrupulous mortgage brokers looking to make a buck. Now that interest rates are rising, many of these borrowers cannot keep up with their ever increasing mortgage payments. If you cannot qualify for a traditional mortgage, you may be better off renting until you can stabilize your credit history, job situation, and other areas of your financial record.

2. How much house can you afford?
Many people get in over their heads because they want more than they can afford. Your mortgage broker will look over your documentation and make a recommendation of how much you can afford to borrow. If the broker believes you can afford payments of $2500 a month, but you know that you cannot, look for a smaller home or one that is lacking "extras" such as a pool or three-car garage. You can always add these things later when you have paid down your mortgage some.