If you want to purchase a home, you need to determine if you are financially ready. Buying your first home is one of the most important financial steps you will ever make in your life, so it is crucial that you take this step seriously and prepare yourself as much as possible.
Normally we can straight away dive into the myriad of property portal to look for the new property launch but most of the time having just that information is not enough to help you make the important decision. Thus, these tips can come in handy in helping you to find and secure your first home.
Figure Out If You Are Ready to Buy a Home
Home ownership is much more expensive than renting, as you are responsible for paying for any maintenance and repairs and you might have additional utility costs, like garbage and water. You will also need to pay for taxes and insurance associated with your home. If you are currently in debt, you need take the time to budget, get out of debt, save an emergency fund and at least a down payment before purchasing your first home. If you buy before you are ready, you could end up in a negative financial situation, so make sure you are ready before you even start looking at potential first homes.
Start Shopping for a Loan
Before you even beginning shopping for a home, you need to shop for a loan, according to Bankrate. Shopping for a loan first will allow you to determine which price range you can afford before you begin looking at homes. You should also contact at least three people before deciding which loan to take. A mortgage broker will look at several different loan companies to help you find the best rates, but your local bank or credit union may have several options that can save you money as well. Once you find the ideal loan for you, you can begin shopping for your dream home.
Find The Best Payment Options and Loan Types
Determine which different loan types and payment options are available to you when it comes to paying your mortgage. For example, determine the difference between private mortgage insurance (PMI) and adjustable-rate mortgages (ARMs). A fixed rate fifteen or twenty year loan is usually the best option, when it comes to locking in a low interest rate. Be careful when determining how to cover your down payment. It is usually best to be able to put down a 20 percent down payment in cash rather than using creative financing, since you need to be able to build wealth with your home purchase in order to come out ahead financially in the long run
Be Honest About What You Can Afford
You need to be honest with yourself about how much house you can actually afford. The best rule of thumb is to keep your home expenses — mortgage, taxes and insurance — within 25 to 30 percent of your annual income. If you spend too much on your home mortgage, you might not be able to pay for daily expenses or save for retirement. It is better to go with a smaller home than you can afford and build your savings as much as possible for retirement and travel. Once you have come to a decision on how much house you can afford or how much you want to spend on your first house, you need to get pre-approved for a loan.
Getting a first home might be a new development that you can easily read through the full details of the project via PropertyGuru New Property Launch or if you are looking at secondary homes, such a property portal like PropertyGuru can come in handy as well. Either way, you will be able to deduce your affordability as these property portals will give you a clear idea on how much you need to fork out every single month.
Find a Good Realtor
After you are pre-approved for your loan, it is time to find a realtor who listens to your wants and needs. Your realtor will make recommendations and explain the housing market in your area, as well as find a home that will suit your needs within your price range. After you make an offer on your first home, your realtor will help you negotiate terms with the seller. The best way to find a great realtor is through recommendations from friends and colleagues.
Request a Home Inspection
One of the most important steps of the home buying process is a thorough home inspection. Different from an appraisal, you need to pay for a home inspection, through which you can learn about any structural problems that could prevent you from purchasing the home. From mold problems to termites to a weak foundation to a bad roof, any number of issues could keep you from buying your dream home and it’s best to discover these issues before you sign your offer on the house, since this inspection can save you thousands of dollars in repairs in the future. You can negotiate a lower price with the seller if you find out that the house needs a new roof, for example.
Be Patient During Escrow
After you bid on your house and the offer is accepted, you go into escrow. The escrow holder works to ensure that all of the documents, money and other important information is together before you close on the house. The escrow process is in place to protect everyone involved — the buyer, the seller and the lender. It can take a matter of weeks to complete the escrow process, but once everything is completed, you can sign the closing papers.
Close and Move In
Once you have closed on your home, you can move in, paint and unpack. Make sure that you change your address at your bank and on other accounts right away. You can also set up your utilities and cancel utilities at your old home to save time and money on late fees. Many companies will waive installation fees if you simply transfer your old utility account to your new address.