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14 Crucial Questions You Should Ask Yourself Before Buying A Home

With answers explained as if you were drunk.

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1. Do I want to live in this area for the next five years?

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Why? Because there's a chance you'll lose money on the house. “It takes about 5 years to make your money back on your closing costs alone,” Egypt Sherrod, author of Keep Calm…It’s Just Real Estate and host of Property Virgins, told BuzzFeed. “Having the house for over 5 years can keep you from losing money on your upfront investment.”

2. Will I be having kids while I live there?

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If you *might* have a family while living in your home, look at the school districts of your prospective home and think about if you could see yourself raising a family there.

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3. Is the neighborhood walkable?

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This is ideal if you're thinking about renting out your property shortly after you buy. Also, make sure the area has high-yield rents. “If there’s a college campus nearby where people will be renting instead of buying, even better,” Sherrod said. This can ensure that your property is rented quickly and consistently so you can MAKE DAT PAPER.

4. Should I get a Federal Housing Administration loan (or FHA)?

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"An FHA loan is more flexible if you don't have pristine credit, while a conventional loan is stricter," Lottie Garcia, mortgage loan consultant for Primary Residential Mortgage, Inc., told BuzzFeed. For an FHA loan, you need a minimum down payment of 3.5%. Then, the bank will add mortgage insurance fees, which means you'll have a higher monthly payment.

5. My bestie and I are going in on a house together: Can we both pay equal amounts?

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“After two people sign the property deed, the equity is 50/50,” Sherrod said. “This means that if you went to sell the house, the profit is split in half despite the fact that one person might have put more money into the house than the other.”

6. WTF is equity?

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Equity is the difference between what is owed and how much something is worth (if you sold it). For example, let's say you own a house worth $100,000 and you have a $90,000 mortgage. Your equity is $10,000 aka you get to bank $10,000 in profit when you sell.

7. Do I have extra ~cash money~ on-hand for closing costs?

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There are a bunch of extra fees that come with buying, but they vary from state-to-state. "They usually cost a few thousand dollars," Sherrod said. But consider your options. Could you get a family loan or borrow from your 401K? Think about the time it would take for you to save up that extra money.

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8. Have I talked to a mortgage loan consultant yet?

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They can give you idea of how much your closing fees would be based on your location, property size, etc. This can help you get a sense of whether or not you actually have enough money to buy.

9. Do I want a fixer upper?

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If you're into fixer uppers, understand these two words: MARKET VALUE. "Make sure that your renovation cost does not go over the market value of the house," Sherrod said. "You want to be able to make back what you put into it."

10. What does it mean to get pre-qualified and do I have to do it?

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Getting pre-qualified for a loan is important because the bank or loan officer will give you an idea if your finances and salary are fit for a mortgage. Speak with the mortgage representative at your local bank branch, meet with a loan officer, or find out online (Chase, Bank of America, and other banks have online pre-qualification options).

11. How do I get pre-qualified?

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The process is free! You'll have to supply a few W-2 forms and a credit check. Also, keep in mind that pre-qualification only lasts around 4 months. After that, you'll have to get refresh your qualification.

12. What are the pros and cons of buying a condo?

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Pros: With a condo, you don'’t have to deal with board approval (like a co-op) and you can easily sublet your space. Also, monthly maintenance fees for condos are much lower than for co-ops (but you should look into the property taxes).

Cons: Condos are generally more expensive than co-op apartments, and your monthly maintenance payments are not tax-deductible.

13. Or do I want a co-op instead?

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Co-ops are generally less expensive than condos and some of your monthly maintenance fees are tax deductible. But know that all buyers must be approved by the Board of Directors, which can be a time-consuming process, and it can be harder to rent out your place in the future. And since co-ops are less common, there might be some complications in getting a loan.

14. Is my heart set on a house?

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Homes are likely to appreciate more and there's usually more demand from a resale perspective. But you'll also have more repairs to shoulder than you would with a condo or a co-op, and you'll have to pay property taxes. Learn more about property taxes in your state here.

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