Buying a home is the biggest financial commitment most of us will undertake in our lifetime. Before purchasing a home, you need to weigh up the pros and cons as some find renting is a better solution. If you are determined to be a homeowner, we have given a few of the significant aspects you need to consider before purchasing to help take the stress out of buying a property. An inspector will check the building structure, electrics, plumbing, and look for pest infestations. The inspector will help you get grips with the property’s condition and recommend mandatory fixes before you move in.
Improve Your Credit Score
Before speaking to a real estate agent or lender, you need to get your credit score in order. If your credit score is not very good, you should take the time to improve it. You can improve credit scores by making sure that you have no debts in either student loans, credit cards, store cards, or car finance. Having a good credit score today can save you thousands in repayments on a home throughout the life of the loan. Lenders will want to see that you are free and clear of all debt and have a healthy bank balance. Credit scores are determined by many factors and by taking the time to understand these you can make serious improvements fairly quickly.
Search for Lenders
We are inundated with the choice of lenders for home loans, and there are some fantastic deals available if you take the time to look. Have a figure in mind that you can afford to pay each month for the repayments and start speaking to lenders or brokers, be it in person or online. You will be offered competitive low-interest rates for loans when you have a good credit history and a large deposit. Most lenders want to have a twenty percent deposit, but if you can add more to this, it will drastically reduce your repayments. Keep in mind that you are not only looking for low repayments now, but you want them throughout the length of the loan. Many first-time buyers get sucked in with great rates for the first two years but then struggle when the interest rate increases.
Study the Area You Want to Buy Property
A number of buyers get fixated on trying to buy their home in an up and coming area so they can make money from their investment. Try not to get carried away with making money and focus on where you want to live and where you and your family will enjoy staying. There are guides available that will show you past purchases in a specific area, and this will give you an idea on what you should be paying for a particular property type. Homes located near good schools and amenities will cost more than those that are slightly “out of town”, but you may prefer to live away from the hustle and bustle, so this could suit your choice. Always remember that your home is where you will live and is not just an investment, so look at areas you will enjoy staying long-term.
Evaluate What You Can Afford
If a lender approves you a loan for $300,000, this does not mean you need to spend all of that on a purchase. You never want to be stretched when making repayments, so choose a property that you can afford and still live a comfortable life. Try not to factor in overtime you are putting into today as this is not guaranteed income in the future, and if that stops, you may start to struggle financially. By purchasing a property at a lower cost than you have been approved for, you will always be able to get another loan should you require it. Home loans are generally for a term of twenty to thirty years, so this is a long-term commitment, and you never know what will happen tomorrow, many owners have lost thousands because of overreaching their financial abilities.
Use a Trusted Real Estate Agent
Real estate agents make their money on the commission of sales, which can make them focussed only on selling homes fast. Search for an agent with a good reputation who has carried out many sales over several years. If they have been in the business for a long time, then they are more likely to be honest and understanding of the buyer’s needs, rather than their commission. Check reviews and speak to people you know who have bought property to find an agent that you can trust and is not pushy for you to commit to a sale.Learn your options; find more from Moreira
Get Thorough Inspections
Once you have found a property that you like and are considering making a purchase, start looking for quality inspectors to evaluate the building. Never rush into a purchase without having a thorough inspection for fear of missing a good deal, this can only lead to problems in the future. An inspector will check the building structure, electrics, plumbing, and look for pest infestations. You can also check with the local authorities for flooding in the area as this may cause issues down the road and could make your property worthless. Building inspectors should be authorized and licensed by the local authority to ensure they are capable and thorough.
Consider all the Expenses
Before committing to a purchase, you should consider all the expenses you will incur as a homeowner. Property tax, utilities, insurance, and maintenance all need to be factored into your expenditure. One of the best things about being a rental tenant is you have a fixed monthly bill, and the owner needs to cover the additional costs. It is generally accepted that maintenance costs on a home can cost between one and three percent of the property value per year, which can put a strain on finances if not accounted for when buying.
Buying a home can be the best investment you will ever make so long as you understand all the factors involved. It will give you a roof over your family’s head, provide you with pride of ownership and could be a money-making investment that will set you up for retirement. Don’t be put off by the horror stories, understand all the expenses, and start preparing for the search for your home today.