Don't be impulsive when buying a home, say real estate experts

It may look like your dream home, but experts emphasize importance of determining whether its worth the asking price.

We’ve reported recently on some of the positive trends in the housing market that suggest it is approaching a state of steady recovery. Experts expect that it will continue to improve in 2013, meaning that there will likely be more people buying and selling homes in the near future than there have been in the past few years following the most recent recession.

According to Fox Business, reasonable housing prices and historically low mortgage interest rates may inspire many buyers to make impulsive decisions when it comes to buying a property, but it’s essential to understand the true value of a house before making an offer.

“Take your emotions out – it’s a business decision,” Michael Corbett, a real estate expert at Trulia, told the source. “Don’t throw money at a purchase price out of the excitement of a bidding war.”

There are a number of factors to consider that can help people determine if a property is really worth its selling price. One thing experts advise is looking into the cost of homes in the area that have sold in the past couple months to see if they are comparable to what you’re ready to pay. Additionally, even if the house you just looked at does seem like a dream home, it’s important to figure out if you can afford the monthly mortgage payments. According to the source, experts suggest paying no more than one-third of your income on housing-related costs. 

As the housing market continues its recovery and more people are purchasing homes, lenders may want to invest in loan management software to ensure that borrowers can stay on top of their monthly payments.