Wednesday, June 30, 2010

Buy a House with Knowledge -- Be a Smart Consumer




This is a good year to make a home purchase. With many homes on the market and many more in foreclosure, you can likely make a good deal on a new home, or a home new to you. A little work and thought on the front end will save lots of hassle as the years of the mortgage roll by.

Consider the Mortgage

The mortgage on your home is a major expense every month and every year, and thirty years is the majority of your working life. Be sure to check the interest rate and the monthly cost of a fifteen-year mortgage. A fifteen-year mortgage will save thousands of dollars and the house will be paid much faster.

Look at the Insurance Costs

If you can pay 20 percent down on a house, you can avoid PMI insurance that has no benefit to you. You may also be able to handle your own taxes and insurance payments so these are not paid monthly to the mortgage company. Why let the mortgage company get the interest? You can set up a personal savings account and earn the interest on the taxes and insurance money until it is due.

Do not accept the insurer the mortgage company uses. There is better coverage for less, if you shop around. Understand homeowner's insurance and ask for an explanation for any charges you do not understand.


Read all the Paperwork in Advance


You are entitled to a copy of the paperwork before the closing. Make sure you get a copy and review it carefully in advance. Ask about closing costs, and why you, the buyer, are paying certain items.

We have written an article about the pitfalls of buying a home that may help you be a smart consumer.

May all your purchases be good ones!

Linda
cajunC

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