| How to Buy Your Home, Part 3 |
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Inspection. The real estate agent who is working for the seller mayor may nothave a conflict of interest in recommending an inspector, so you may want to retain one on your own. You should receive a written report from whomever you use. It also is very helpful to accompany the inspector during the inspection to discuss any problems the inspector may uncover. It's actually kind of fun, and a good inspector can be very helpful in advising you about making repairs and minor improvements later on. Mortgages. Stick with garden-variety mortgages. Your parents probably survived quite nicely on an old-fashioned fixed-rate mortgage, and these are still the best mortgages for many first-time home buyers if interest rates are relatively low at the time the mortgage is taken out and you expect to stay in the house indefinitely. Adjustable-rate mortgages with reasonable caps on future rate increases are also fine. Avoid unusual financing arrangements, notably interest-only mortgages where you never pay down principal and adjustable-rate mortgages (ARMs) with substantial future hikes in the interest rate. These latter mortgages were the cause of the recent subprime-lending debacle. Homeowners had been induced into taking low-interest ARMs whose interest rates rose dramatically in future years. |
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