Steps to the buying process

A consideration of home ownership is how long you intend to stay in the home. Because of closing costs and the fact that your first few years of mortgage payments will go mostly towards paying the interest on your mortgage, it will take a few years for you to “recoup” the expense of these costs.  The first five years of mortgage payments usually only cover fees and interest. Due to the amortization structure of most mortgages the vast majority of the interest paid towards the principal is paid in the first 10 years of the mortgage. However, have heart there are ways that you can pay off your mortgage faster and save a great deal of money and interest payments. But, that’s a whole different book altogether.

Find out if the areas you are interested in buying in are in fact the kind of areas you would want live. Once you have narrowed down a potential property it’s a good idea to drive through the neighborhood a couple of evenings to see what the neighborhood is like at night. Consequently it is also a good idea to drive through the neighborhood on the weekends again with the purpose of getting a feel of the neighborhood.

If your city is expanding to the north, for example, you may want to look for property in that area, as it is very likely to appreciate in value much quicker than in other areas.You might find a good “bargain” in declining neighborhoods. If you’re looking for the most house for the money, you might consider purchasing in a declining neighborhood. There are a great many neighborhoods that were considered to be undesirable at one point in the past that are now neighborhoods of high demand and million-dollar properties. Bedford Stuyvesant Brooklyn is a perfect example of a neighborhood that at one time was considered to be an undesirable neighborhood. However, today Bedford Stuyvesant is neighborhood that is in very high demand. So much so that it has the property values to prove it.

If you intend is to buy and then sell your house for a profit in a fairly short period of time (five years or less), it may be best to avoid purchasing a property in a so-called declining areas. With such a short period of holding time you may not experience the appreciation in value needed to realize a profit when you sell the house. Speak to a real estate agent who is familiar with the area you’re looking to purchase in. They should be able to provide you with detailed information about the home buying process in that particular area. A good real estate professional can save you a lot of heartache and headache when it comes to determining what is and what isn’t a good buy in their given neighborhood.


John Workman, PhD.
JA Home Sales, Inc.
Tel: 347-460-1860 Fax: 347-244-7180