Is This The Way To Go With Real Estate?

For pple who know real estate, please help me with this. I am wondering what steps I should follow to buy a house. Is this procedure correct?

1. Find the house - includes checking crime in area, school district, potential for property appreciation, etc.

2. Borrow money (from bank, etc. at the lowest interest rate) with the house as collateral.

3. Pay for the house in full.

4. Pay back the loan to the bank in installments over a number of years (e.g. 20-30 years).

5. Keep refinancing the loan when interest rates fall.

Could someone please explain refinancing in brief and also how often one should do it? Thanks for your help.

Is This The Way To Go With Real Estate?postage rate

Your first step should be to find financing and get approved for a loan. This narrows your search to that wich you can afford.

In step 2 (find a house) you should search for one that has growth potential, or is well underpriced so that you have instant equity in the home. This is where a good agent comes in handy.

Step three is begin paying off the loan. by the terms you are given.

Refinancing is a tool used in certain circumstances. If you bought the house at 100% financing. you will want to refinance as soon as you have 20% equity. You will be getting a better loan at that time. You will want to refinance an adjustable loan to a fixed loan if rates are going up. You can refinance if you will get a lower interest rate and have little or no costs to pay. You can also refinance to get a cheap loan from the equity of the home.

You do NOT really want to pay the house off. At least not while you are working. This is because mortgage interest is cheap and tax deductable. You will have a cheaper loan than you could get otherwise, and you will be getting more of your money back from the IRS. If you are getting close to paying off the mortgage before retirement then borrow some more and out it in an IRA or other investments. Try to pay the home off only upon retirement so that you no longer face payments while having lower income.

Is This The Way To Go With Real Estate?

loan

You should find a realtor. But you should go to the loan place first. You should know how much you qualify for before looking at houses. Then you can narrow them down to what%26#039;s in your price range. The realtor will help with the rest. They%26#039;re free for buyers!!|||You should probably get pre-approved with a bank or mortgage company before you look for a house. That will help you decide what price-range you need to look in.

Refinancing is usually only a good idea if the the interest rate drops considerably and you are planning on keeping that home for more than 5 years. Most lenders charge 1% of the loan plus other closing costs to refinance.|||1) First, go get preapproved BEFORE you shop. You need a reasonable price range before you fall in love with anything.

2) As far as refinancing-- there are almost always costs, so you have to figure out how long it would take you, with the lower rate, to break even. Bank of America has a great program where you can lower the rate to the best possible rate once a year, for free.

Also, regarding refinancing, if you keep refi-ing to a 30 year loan, you%26#039;ll never pay it off.

Also, get a home inspection and use it to negotiate for some money off if any problems come up.|||The step you are missing is

-1 Find myself a good realtor.

Then the rest are fine.

You should only refi when the new rate will be 2% lower than your current rate. Of course thats not what most people are doing these days, but they are being conned into it by loan reps. They belief they are getting free refi. when in fact all refi cost money. So only do it when it will give you a nice return on YOUR money.

Best of luck, you are smart to think this all through carefully.|||I believe you should find the right and correct loan first and do your research on the type of loan and all that it has to offer. see if there is a loan with a low rate that is locked in so you won%26#039;t have to refinance so many times. If you are looking to do that you might as well get a starter or fixer upper so you can put money into it and make a profit so the middle man can get cut out. but always make sure the home is in a good neighborhood and school district. Also another thing to consider is make sure you can eliminate any bills that will get counted against your income so you%26#039;ll be able to get the largest amout for your income and be able to play with and high end and low end of your loan amout.