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4 Little-Known Facts about the Real Estate Market Consumers Should Learn

Written by Posted On Friday, 04 August 2017 18:55

Buying or selling a home can seem like a simple process until you actually have to do it yourself. Real estate is full of minutiae, some of which you would never know unless you've actually gone through the process of buying or selling a property. Here are four little-known facts about the real estate market that consumers should learn.

Consider Your Credit Score When Getting a Mortgage

Most people who buy a home or other property use a mortgage to do so. There are a number of factors involved when getting a mortgage, including how much money you make, how stable your income is and how much of a down payment you have. But all of those factors are secondary to your credit score. If you have a bad credit score, you may not be able to get a loan, even if you have sufficient income to make loan payments. If you do get a loan with a bad credit score, your interest rate will be higher than normal, which means you can pay tens of thousands of dollars more in interest costs over the life of the loan.

Closing Can Take a Long Time

Unless you are paying with cash, the closing process for a home sale can take months, which means the time you can move into your home may not coincide perfectly with the time you need to move out of your previous residence. Some companies, such as Stadium Storage, know that if that happens, it can be a good idea to rent a self-storage unit to store your stuff. Which would mean you need to stay in a hotel or with a friend or relative until you can move in.

You Don't Need to Have a Down Payment

Many people think you can't get a mortgage if you have a small down payment or none at all. That's not true. As long as your credit score is good and you meet other criteria, you can get a loan for very little or no money down. The caveat is that you will pay mortgage insurance until you have at least 20 Percent equity in your home.

Buying a Home Has Hidden Costs

You can expect to pay more than the "sticker price" for your home. Closing costs usually are anywhere from 2 to 4 percent of the price of the home, and owners can expect to pay up to 2 percent of the price of the home annually in ongoing maintenance costs.

These are just a few of the real estate market's little-known facts. Your best bet is to educate yourself about the market as much as you can so you can make the right buying or selling decision.

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Rachelle Wilber

Rachelle Wilber is a former real estate agent now turned freelance writer that specializes in home realty, mortgage, and building. She graduated from San Diego State University with her Bachelor's Degree in Journalism and Media Studies.

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