1) Start With Your Credit

If you’re in the market for a home, the first thing you need to do is assess your credit. Do you know what your FICO score is and how it affects the interest rates you get? It’s best if you can start with a house buying plan about 3 years out from when you actually intent to buy the house because this gives you more time to improve your credit. Credit repair is unfortunately a slow process but it’s worth putting in the effort because people with the best credit get the best loans. This doesn’t mean you won’t be eligible for a bad credit mortgage but it’s better to plan ahead.

2) Only Buy As Much House As You Can Afford

When people start looking at houses, they automatically look to buy their “dream” house. A better course of action is to get pre-approved for a loan and then only look at houses in your price range. Don’t even get tempted to look at houses outside your budget as then your expectations will start to rise and you’ll start to justify a more expensive home. Buying your “dream” home can quickly become a nightmare when you are house poor. House poor is a term that refers to people who spend too much on their homes and now have no extra money for emergencies, long term savings, or daily living expenses.

3) Don’t Buy Unless You Are Going To Live In The House For 5 Years Or More

This is especially good advice to follow in this current uncertain economic market. If you are unsure if you will able to live in the house you are buying for the next 5 years, then it is probably better to rent. When you factor in all the expenses of home ownership such as closing costs, moving expenses and basic home improvements, then renting is usually more cost effective in the short term. With the problems we’re currently facing in the US job markets; it may also be a good idea to remain flexible about relocating to pursue better employment opportunities.

4) Consider The School District

A lot of home buyers fail to consider the school district they’re buying in but it is a major factor in determining home values in an area. If two exact homes are for sale at the same price, you can bet the one in the better school district will sell first.

5) Get a Home Inspection Done

In most cases, an appraisal will be done by the bank so they know that the loan they’re giving is a good investment but you need to get a home inspection done as well. A home inspection should be done by a qualified inspector that the buyer hires himself. The inspector will examine the house and tell you what sort of problems you could have in the future, such as needing to replace a roof, possible basement flooding, or wall mold. It may cost you a few hundred dollars to get the house inspected, but it is one area where you don’t want to cut corners. In addition, you can try to get the inspection rebated by the seller or make the purchase agreement contingent on a positive home inspection.