How to Buy a Home Cheap
The housing market is the one most affected by the economic downturn that caused savings of many Americans to dwindle down to nothing. The recession wiped out the asset values of existing home owners and also made finances extremely tight for prospective buyers through lay offs and drastic salary cuts.
The net result was that although home values were dropping like stones, there were not many hopeful buyers who could afford to make an investment. There was no way to predict where the housing market would bottom out so there was also no way for hopeful buyers to identify the right time to invest.
Much shoring from the government in the form of tax credits and easing of loan preconditions and returning confidence in the economy have now served to put the brakes on the falling housing segment prices. If owning a home is a dream of yours then this is the time to fulfill your dream with minimum outlay.
Improve Your Credit Score
Your credit score tells your lender how much of a credit risk you are. The interest rate on your loan rises when your credit score is low. Make sure you pay bills on time, keep unpaid balances on cards low and pay off long standing outstandings well before you apply for the home loan. These acts will boost your credit score so that the lender can see you are credit worthy.
Foreclosed Homes are a Bargain
During the recession, several home owners were unable to repay their mortgages and were forced to foreclose on their homes. Such homes will typically sell for prices that are much lower than prevailing market prices because both the lender and the home owner want to recover as much money as possible from the asset as quickly as possible.
You can simply take a walk through the neighborhood where you want to buy a home and look for homes with “Foreclosed” signs on the lawn. A local real estate agent should also have a list of foreclosed properties for you choose from.
Hire an Agent
Experienced real estate agents have a good number of links with agents and lenders in many locations. These links ensure that your agent will be aware of both sellers as well as home owners who cannot afford to fully pay off their home loans. Also, an agent will have a good idea of existing prices in different localities and he can negotiate the best rates for you.
Most home owners find that the money they save in their agent-enabled home purchase far exceeds what they pay to hire him/ her. Of course, making sure that you find an honest, experienced agent is a basic criterion for this.