Getting on the property ladder can be extremely exciting; however it can be equally frustrating. There are many aspects of the process that would appear strange, especially to a first time buyer. This is why it is always important to gather as much information as you can before getting into the fray. Here, we’ve put together a few essentials you need to know in order to buy a home.
Can you afford a home? – While buying a home is definitely a step in the right direction, you need to first ask yourself if you can actually afford a home. Apart from raising the initial deposit, which will likely be at least 20% of the value of the property, there is a whole gamut of expenses associated with buying a home that you need to plan for. This includes: stamp duties, solicitors fees, insurance and so on. Of course, on the long run, buying a home is way cheaper than paying rent, but you need to make sure you are ready for the responsibilities that come with home ownership.
Know your credit score– One method lenders use to determine if you qualify for a home mortgage is by checking your credit score. This is a history of all your transactions and show if you are usually up to date with your financial responsibilities. The higher your credit score, the more your chances of securing a mortgage. Home finance advisers, Mortgage Savings Experts suggest that you first take time to check your own credit score before applying for a mortgage. This way, you can detect any detect any discrepancy that can hurt your mortgage application and sort it out before proceeding with the mortgage application.
Decide what you want – The excitement of being a homeowner may cause you to make certain strategic mistakes which may have far reaching consequences. For example, you can make the mistake of buying a home in a neighborhood you cannot afford. This is why it is always a good idea to spend some time deciding on what you want. This includes deciding on the type of house, the age of the structure, location, proximity to amenities and so on. Fortunately, there are several experts such as The House Shop who can help first time buyers wade through the unfamiliar waters of the property market.
What mortgage do you need? – Not everyone knows that there are different mortgage options available to first time buyers. From fixed loan mortgages with lower interest and a higher monthly repayments to the adjustable mortgage option. It is your responsibility to analyze all the different mortgage options in order to identify which one works best with your financial situation. It is also a good idea to get an expert who will help you study these options and make recommendations based on your unique situation.
Start saving for the deposit – As earlier pointed out, the initial deposit for a home falls anywhere between 10% and 20% of the total value of the home. This may appear small on paper but can actually be a huge sum of money depending on the location where you want to buy the property. It is never a good idea to leave off saving for your deposit until it is too late. Instead, explore financing options, evaluate the way you spend money and start putting a few bucks away every month.