USA Best Credit Report

The following is an excerpt from America, Welcome to the Poorhouse: What You Must Do to Protect Your Financial Future and the Reform We Need, courtesy of FT Press, imprint of Pearson. Originally published in “America, Welcome to the Poorhouse.” For a similar perspective, see my suggested guidelines for buying a home.

Once you start house-hunting, you need to consider features that make the house a solid investment—not just ones that meet your family’s needs, but will be attractive to the next buyer.

1. First, shop around for a mortgage. Why so soon? You’ll need to get preapproved by a bank for a home loan up to a certain ceiling—actually, many real estate agents will require preapproval because they don’t want to waste time showing homes to potential buyers who can’t afford them or won’t be approved for a mortgage. Make sure you specify that you want to be qualified for a fixed-rate mortgage. While you’re not bound to borrow from the lender and it’s not obliged to offer you the loan, the lender will probably require you to pay an upfront, nonrefundable-if-you-don’t-get-a-mortgage-from-them fee of a couple hundred dollars—and may also require a nonrefundable deposit too. Preapproval means you’re actually starting the loan process with a lender—filling out an application, letting them go through your credit, etc.—but approval typically hinges on the property passing a satisfactory appraisal and inspection(s). That’s why you should shop around for a mortgage and a lender before you ask for a preapproval. A good place to do this is on the home page of HSH Associates under the heading: Browse Lenders and Rates in Your State: http:/ /www.hsh.com/.

2. Once your approval is ready and you’re ready to “shop,” research neighborhoods by their school ranking even if you don’t have or intend to have kids because the home will be more valuable to the next buyer. Typically, the state education department will have the rankings of the school district’s average SAT score, the percentage of kids who go on to college, the student-teacher ratio, and other important criteria.

3. Check out how close the prospective home is to schools, along with recreation facilities: ball fields, parks, playgrounds, pools, etc. Again, these are features that may not only appeal to you but also make it a good investment for the next buyer.

4. Check out the appearance of nearby homes; you’re not just investing in a home, but a neighborhood.

5. If possible, only consider homes with features that make your home a good investment for the next buyer: at least two bathrooms, a basement, three bedrooms, and a two-car garage (assuming that your prospective home is in the suburbs).

6. Consider a “bargain” home—not only fixer-uppers if you’re handy with a hammer, but a small home on a large lot in a great neighborhood that can be expanded.

7. Before you make an offer on a house, “test-drive” your potential commute to work at rush hour.

8. Even if a home inspection is not required in the area where you’re house-hunting, have the house inspected before you buy so that you don’t wind up with expensive repairs.