Buying a house of your dream

We recently moved and needed to buy a house. I thought I share my experience in house hunting. Whether this is your first time buyer or not, it may be a good idea to learn it again.

First, what you have to do is to set some money aside for your new house. If you don't have cash to pay the house in full, you need a mortgage. A pre-qualifications from your lender is recommended so you know how much house you can buy. Current conventional 30 years mortgage interest is around 4%. To avoid Private Mortgage Insurance, you need to put 20% down. Depending on the city where the house is located, closing costs could ranged from $2500 - $5000. Lenders may required you to put 2 month reserves for taxes and insurance. If you are looking to buy a $300,000 house, you will probably need about $68,000.

If you don't have that much money, there is an option to get an FHA home loans that only requires to put 3.5% down, which significantly reduce the money to set aside around $10, 5000 plus closing costs, earnest money and other reserves.

If you are a first time home buyers, you may qualify for some first time home buyers credits if you purchased your house by July 2011. Please check with IRS publications.

As I was searching for houses, other than regular sale houses, there are HUD houses available for sale. Unlike regular sales houses that sold by the house owner, HUD houses is sold by Federal Agencies.

If you do want to buy a HUD homes, you need a real estate brokers. Referrals from friends or internet directory for realtors is a good start. I suggest you do your own interview to choose the one that fits with your work style. Some brokers needs a contract, some don't. Most brokers will provide you list of houses according to your parameters, shows the houses, do a comparative market analysis (CMA), write and submit a contract, negotiate on your behalf, help with house inspection and do the closing. Zillow.com, Trulia.com or Redfin.com are some of real estate search engines you can use. Other than house listing, some provides lists of realtors, information about neighborhood, advice, etc. I found out that Zillow are not always accurate with the newest house listings.

After the contract is accepted, the next step would be a house inspection. House inspector helps find major flaws in the house. Some brokers have worked with house inspectors in the past. It's a good idea to choose home inspectors you are comfortable with.

If the house looks fine, then you will come to the closing, sign the paperwork and you are a new home owners. Congratulations...