Buy or rent? That is the dilemma facing many potential homeowners today. It seems that buying a home is more costly - and time demanding - than renting a home. However, if you can comfortably afford to do so, and you have plans to stay at your location for a while, buying a home has significant advantages.

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There are times when renting a home is the more sound choice to make. For example, if you are only going to be at your place for a couple of years, it makes no sense to buy the home, as this would be the more expensive endeavor. If you buy or sell in a short period of time, you may actually lose equity.

Also, renting  makes good sense if you've identified the general area in which you want to live but haven't made a final decision as to the specific neighborhood. If you don't know whether you'll feel comfortable in a particular neighborhood, it may be better to rent a house or an apartment there for 6 months or a year, to get more comfortable with it.                     

The ongoing costs of home ownership.
Maintenance, improvements, taxes and insurance are all costs that are added to a monthly house payment. If you buy a condominium, townhouse or in certain communities, a monthly homeowner's association fee might be required. If these additional costs are a concern, you can make choices to lower or avoid these fees. Be sure to make your realtor and your lender aware of your desire to limit these costs. 

How many times have you or someone you know made a major purchase like a car or first home, and then within three months you start receiving tons of mail from lenders offering to re-finance you at a lower rate? Well guess what, you qualified for that lower rate when you made that purchase, but because you acted to quickly,you never knew what hit you. (The Bill)    Many borrowers who have had difficulty obtaining credit in the past may underestimate their ability to obtain new sources of credit and accept the first offer of credit they receive, rather than shop for a loan with the best possible terms.Homebuyers Workshop

1.) Check your credit:  Before you apply for a home loan, regardless of your credit, it's a smart idea to obtain a copy of your credit report from the three major credit bureaus and review the information. if there are errors or things that need to be addressed, it's easier to address them before you have found a house, than after you have found a house and are trying to close your loan. I had a client who had an outstanding utility bill from a prior home address on her credit report. she provided a copy of her cancelled check to the credit agency showing that she had previously paid this bill in full. Her credit score was recalculated within 45-60 days and she qualified for a lower interest rate on her home loan which eventually saved her thousands and thousands of dollars. Remember this could have been a Hospital bill, cell phone bill, or any creditor who did not promptly report that your outstanding debt had been taken care of.  If you know that there are a few blemishes on your credit, let your lender know what they are, why they are there, and why you are still a good credit risk. Lenders look at your credit to determine how likely you will pay back the loan. If you had extenuating circumstances - like the loss of a job or medical bills - let them know so that they understand that it is not likely to happen again in the future.Home buyers Workshop

2.) Get approved before you buy: An approval means the lender has reviewed your credit history, verified your assets and employment, and has approved your loan before you have found a home to purchase. As long as the home appraises for at lease the purchase price, the loan should close.  Getting approved also gives you an advantage over other buyers. Your firm approval makes it easier for you to negotiate on the price of a home, than a person who is not approved or is pre-qualified. While getting pre-qualified may sound official, it is really just getting an idea of what you can afford. It's having a person plug in a few numbers that you give them - your monthy income and your monthy debt - and getting an approximate payment calculated. You can do that today right here on this site by clicking on the calculator. Because your assets, income or credit is not verified, a pre-qualification has little value when purchasing a home. I've seen hundreds of clients who received a pre-qualification letter in the mail, and began shopping for homes, only later to find out that they need to improve their credit score and possibly reduce their outstanding debt.

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3.) Find a great buyer's agent:  Traditionally real estate agents represented the sellers in the transaction. When you are not working with a buyer's agent, they are less likely to negotiate the best price or contingencies for you. Remember, a buyer's agent's job and fiduciary resposibility (meaning legal duty) is to you, the buyer. Before working with an agent, establish if they are a buyer's agent or a seller's agent. After spending a lot of time with a Realtor, it's natural to feel like you're a team. But if they are not negotiating for you, then they are not on your team.

4.) Learn about the neihborhood:

 Often times the house you find may be in a neighborhood that you're not familiar with, which is ok. It just means that you'll have to do a little more research. Check out the schools - are they sought after? A good school district means your neighborhood will always be valued by the community which is a great reassurance to purchase, not to mention the value if you have school-aged children. Check out The City Statistics in Illinois.

5.) Protect Yourself:  Ask your Realtor for a copy of the documents you will be asked to sign if you decide to buy the house. Read them ahead of time so that you'll understand the questions that you will be asked, the things you need to know, and the decisions you will need to make.          

6.) Have reasonable expectations:  There is a lot of money at stake. No house is perfect - Always get an inspection. It might be a few hundred dollars, but it's worth it. It's the inspector's job to find any problems with the house that could cost you thousands in repairs down the road.           Home buyers Workshop