Tips for Home Buyers

Tip #1 : Compare For Your Loan

With interest rates still at an all-time low in 2011, you should  not hesitate to line up lenders and make them compete for your business, whether this is your first home purchase or time to upgrade. Take the time to compare, understand  costs, rates, types of loans (fixed vs. ARM), upfront discounts, etc.

Also, spend some time learning about the multiple State and Federal Housing programs designed to help new and existing homeowners such as FHA or VA loans. Check in particular the Santa Clara County Home Buyer Loans Programs.

Once this selection process is over, the key is then to find out how much money you can borrow, which  is an essential  step before even engaging with a local San Jose Real Estate Agent.

Tip #2 : Get Pre-Approved By Your Bank

Most San Jose Realtors will ask you to be pre-approved by your bank before initiating any property search on your behalf.

A pre-approval letter will confirm that your application has been processed and that your loan is approved. Many home buyers confuse a pre-qualified letter with a pre-approval letter. Being pre-qualified only means that, based on your overall financial situation, your lender has estimated that you are eligible to receive a loan and will generally give you an estimate of the mortgage amount for which you may qualify.

Tip #3: Start Small

Savvy home buyers always start buying a smaller house that they can pay off quickly and  typically shop for a bigger home later instead of buying a home which price tag exceeds their  financial means and avoid running the risk of being forced into a short sale position and ultimately being foreclosed.

Providing your monthly payments are timely, this buying strategy will enable you to build equity, establish credibility with financial institutions, benefit from significant tax deductions over time and potentially realize capital gains depending on the trend of the real estate market in the San Jose area where you purchased. Be sure to buy a home close to a top-rated school to maximize your capital gains and your equity.

Tip #4: Renovate Smartly

If you intend to invest in the house you just bought, make sure to spend the most money in the kitchen and bathrooms, which is where most of the resale value of any house resides. The quality, brands and age of kitchen appliances in a home for sale is a critical factor for potential buyers.