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House shopping tips for 2017

Whether a Delaware resident is a prospective first time home buyer or not, purchasing real estate is likely a major decision. For this reason, people might be interested in some tips before buying a home.

At the outset, they might want to be careful about overspending on a home. Generally, the cost of the home should not exceed a third of the prospective buyer's income. Staying within this range will help ensure that homeowners will be able to continue saving for their retirement, easily pay for unexpected bills and stay out of debt.

There are other expenses involved in home ownership, as well, some of which may increase through time. Property taxes tend to go up after a while, even if home values decrease. Then, there is the cost of repairs that will increase as the home ages. For these reasons, homeowners might want to have emergency funding on hand.

When actually purchasing the home, it is a good idea to make a 20 percent down payment on the mortgage. Otherwise, the lender may require the borrower to pay for private mortgage insurance. This insurance can cost up to 1 percent of the loan. However, when the equity in the home surpasses 20 percent, the homeowner might be able to cancel the policy.

Sometimes, when it comes to buying or selling residential real estate, unforeseen problems could arise regarding the home's title or the terms of the contract. Those who find themselves in similar circumstance may wish to seek legal counsel to help resolve these issues.

Source: FOX Business, "Buying a House in 2017? Know These 5 Rules", Maurie Backman, Dec. 12, 2016

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