From making the right purchase decision to getting a loan, there are multiple hurdles that first-time homebuyers will have to encounter. With a little preparation and careful planning, most of these challenges can be overcome so that your dream home is not just a dream, but a reality.
Here are 14 tips for first-time homebuyers:
Analyze why you desire to own a home
First-time home buyers have diverse needs and aspirations, that are not limited to living rent-free. Many people who belong to this market segment purchase homes for rental incomes, as a holiday home in the country while continuing to pay rent downtown, or as a real estate investment which they can sell later on. Find out what your motivation is so that you can shortlist homes that match your dreams.
Get your finances and past credit in order
Pay up all your bills on time for at least 6 months, and clear loans if you have any. Your home mortgage depends on your good credit history, and if you do not have a good credit score, you can work on it.
Start saving money alongside
The more you save, the larger down-payment you will be able to make. This is directly related to a reduction in the loan amount, loan term, and interest you will have to pay. Factor in other expenses such as open house visits, professional consultation fees, etc.
Search for a good home mortgage
Right from the outset, start researching various lending institutions such as banks, co-operative societies, specialized home loan services. This is also the time to familiarize yourself with mortgage-related terminology and how loans work.
Speak to a credit or mortgage consultant
Mortgage consultants usually have inside information regarding the best home mortgages. Consider the services of a credit consultant who will help you get the loan that is tailor-made for your needs.
Apply for a mortgage pre-approval
Mortgage pre-approvals are given by banks to those who wish to buy a house in the near future. Apply for one, and find peace in the fact that you already have a financial backup to buy a home the moment you find it.
Shortlist neighborhoods where you want to purchase
Make a list of neighborhoods that you desire to live in based on your personal needs. Also, certain zip codes fetch better mortgage results.
Pick a real estate agent
Good real estate agents can help you find the house you’ve always wanted. Consider various aspects such as client testimonials, references, informative websites, and your own discretion to choose a real estate agent.
Visit open houses and consider your options
Start visiting open houses to take a look at available options. It might cost you money to visit homes but it is well worth the money and time spent, as finding the right home can be an arduous task.
Don’t be tempted to go beyond your budget
Just because you are approved for a high loan amount does not mean you should purchase a home that is well beyond your budget. Keep things within your limit, and envisage a future where your loan does not burden you.
Hire professional home inspection services
Once you shortlist a house, hire a professional home inspection service to evaluate the cost of repairs and renovations. You can often add these expenses to your loan amount.
Make negotiations with the property owner
Once you have a home inspection report, you can start negotiating with the property owner to decide on a final amount. You may urge the owner to make repairs before you purchase their home.
Apply for the loan
Make an application for a mortgage that offers you the best rates. If you already have a pre-approved loan, now is the time to apply for it. Delaying may result in someone else buying your dream property.
Be prepared for processing fees, stamp duty, and miscellaneous expenses
There are various fees associated with loan processing, getting the property registered under your name, government and insurance fees, etc. Keep these expenses in mind before you set out to buy a home.
Always seek professional mortgage assistance
Home-buying is an exciting but challenging decision to make, and first-time homebuyers need to be prepared for multiple exigencies.
Professional mortgage consultants can make some of your challenges seem easier. Contact a home mortgage broker today, and move one step forward towards owning your first home.