by S D Rios

Created on: May 19, 2006   Last Updated: April 18, 2007

1. Follow the old adage: "Buy the cheapest property in the best neighborhood you can afford!" Why? You have room to move up. With improvements, your home will gain equity quickly by coming up to the value of the surrounding homes.

2. Save for a large down payment. The best way to reduce monthly payments is to have a good down payment to lower your total loan amount. Mortgage insurance can be waived with 20% down.

3. Make an extra payment whenever possible. You can pay off your loan YEARS earlier! Try this prepayment calculator.
http://www.decisionaide.com/mpcalculators /ExtraPaymentsCalculator/ExtraPayments1.asp

4. Check the tax rate in the area. That can make a huge difference in what a house will actually cost you! In my area, some localities have taxes that are twice as high as neighboring towns and counties.

5. If you don't mind making repairs, buy a HUD home in an improving neighborhood. There are special deals for teachers and police officers! (in the US)

6. Make sure your credit is good so that you are a good risk and qualify for the best loan possible.

7. If you feel comfortable doing this, buy a home that has a remodeled garage, basement or attic apartment that you can rent out to someone trustworthy. This could be a short-term solution for those short on money.

8. Research the area before buying. Only buy in a good school district. Important - Call the city planning department and find out about pending projects in the area (highway construction, road widening, etc.) Check on the sales history of the house and surrounding houses. Check the city assessment. Know what you are getting into in order to get the most for your money. You don't want a property that could end up losing value because the area is in a downward slide!

9. Have a home inspection before buying. You never know what is lurking in places that you don't normally pay attention to when visiting homes or that only an expect would recognize as problems. (roof leaks, faulty plumbing, HVAC problems, code violations, etc)

10. Give yourself plenty of time so you don't rush into a purchase without being totally convinced. Also, shop in the off season - late fall, winter around the holidays - there is not as much on the market, but there are also far fewer buyers so sellers are more willing to make concessions.

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