Living In USA

Nothing symbolizes the American Dream more than owning your own house. Record low mortgage interest rates and a strong housing market at this writing have combined to make buying a home worth considering, especially if you will be in the same place for more than a couple of years. Although interest rates may climb again, buying a home will still likely be a sound investment for the foreseeable future. In recent years, the values for homes have continued to appreciate, which, combined with the mortgage interest tax deduction and the money saved in rent, makes buying a home a sound investment. You can often arrange a mortgage payment that is nearly the same as a monthly rent payment would be. The downside, of course, is that you will not have the benefit of a landlord to call when something in the house breaks, as it almost certainly will. Remember, too, that a home you buy can be a house, an apartment, a condominium, a townhouse, or a co-op. In other words, just about any type of housing can be purchased rather than rented.

Real Estate Agents and Brokers
You will almost certainly want a qualified real estate agent to help you. The seller's agent will usually split his or her fee with your agent. This means that you do not pay directly for your agent's services. Nevertheless, the agent is working for you, and a good agent is more than worth the fee. The seller's agent fees (paid by the seller) average around five or six percent of the home's selling price. Your agent is paid by the other agent for bringing a qualified buyer. There is really no advantage for you to try to go through this process without an agent, unless you manage to find a home that is for sale by owner (FSBO), meaning that the seller does not have a real estate agent. FSBOs are relatively rare, and in that case you would have to forgo an agent, pay your agent's fee yourself, or negotiate the fee with the seller. As long as the seller has listed the home with an agency, she or he will be paying the full fee, regardless of whether you have an agent or not.

A real estate broker closes the deal and handles the paperwork. In some states, this is handled by lawyers, but in many, a broker will close the deal. Unless you are very familiar with real estate law, it is probably foolish to try to close a real estate transaction on your own. Real estate agents usually work exclusively with (often they work for) a particular broker, so it is a team you are selecting. The best source for your real estate team, including your mortgage broker (see below) is an enthusiastic recommendation from a friend or colleague.

Mortgages
Setting up the mortgage can also be made much simpler with the help of a professional. Mortgage brokers do not represent a particular lender but can offer a number of competing rates and plans to choose from. Some things to consider include points, adjustable or fixed rates, and the length of the loan.

Some mortgages appear lower but require "points," which are additional percentage points that are paid up front, although they can usually be included in the loan amount. Basically, points should be avoided unless they come with a significantly lower annual percentage rate. Some mortgages are fixed rate, meaning they will not vary for the entire fifteen-or thirty-year period of the mortgage. Others are adjustable rate mortgages (ARMs), which start at a much lower rate but can go up over time, to a maximum that is usually much higher than a fixed rate mortgage. ARMs make good sense if you are confident that you will be staying in the house for just a few years and then selling. They may make good sense anyway, as you can almost always refinance your house if national interest rates are low. Finally, loans are typically offered in either fifteen-or thirty-year durations, although others are possible. Remember that if you can make one extra mortgage payment per year, your loan time can usually be cut about in half.