When you’re ready to start a new chapter of your life as an adult and move into the home of your dreams, there’s no denying that the prospect of shopping for a house for the first time can bring overwhelming excitement. While it’s easy to get caught up in the thrill of buying your home, it’s important to remove your rosy lenses and look at the home buying process from a more realistic point of view.
After all, purchasing a residential property is one of the most expensive investments an average individual can make, so it’s crucial to do your research into real estate before sealing the deal and unlocking your long-awaited abode.
Important Factors to Consider Before Buying a House for the First Time
1. Decide on a Realistic Budget
Your budget is your golden guideline for purchasing your home, so you must set an appropriate spending limit. Start by working out how much you can afford to pay for your home in a monthly payment.
Your mortgage lender can help you determine the ideal debt-to-income ratio suitable for your financial situation but generally speaking. You’ll need to pay no more than 35 per cent of your monthly gross income on your mortgage payment.
Once you have a budget set, it’s time to calculate the possible costs so you can see whether the total expenses will meet your financial capabilities. So, in addition to the cost of the monthly payments, you’ll need to consider:
- Up-front costs (for example, land transfer tax, legal fees, and any repairs to the property);
- Insurances (including your home insurance and property taxes);
- Loan fees and interest;
- Maintenance and repair expenses;
When you’ve added all of these to the total monthly mortgage payment, you should now have a clearer idea as to whether your budget is realistic or not.
2. Know What You Want in Your Home
Whether you’re after a modern, cosy space or traditional structure, you must know what you’re looking for in a home before choosing one to buy. Try narrowing down the type of property that is ideal for you and your lifestyle. Some considerations might include the following:
- How close do you want to live to work?
- Do you have any pets?
- Would you be interested in a property that needs some work?
- Do you prefer expansive outdoor space?
- Are you looking for a space for your children to stay in?
- How important is a home with a view?
3. Plan to Negotiate
They say good things come to those who wait, which is particularly true when negotiating on a home. When you’re shopping for a home for the first time, you’re likely to encounter a seller who will have a number of offers on the table.
Therefore, it makes sense to wait until you have a few offers on the table before you decide. Instead of making an offer on a home on the first day, consider waiting a few weeks to give yourself some time to evaluate the different properties available.
Waiting will give you the chance to find a seller who is willing to negotiate on price. Some sellers will be flexible with their asking prices. If your offer is accepted and the seller is willing to negotiate on price, you can be sure to receive a better deal and potentially save thousands of dollars.
4. Check Your Credit Report
If you have less-than-stellar credit, you must check your credit report before you start working with a mortgage lender. Not only can a poor credit history make it difficult to obtain a loan, but it can also affect your chances of being approved for a mortgage.
There are ways to improve your credit score before purchasing a home, but the easiest way to ensure a good score is to ensure your report is kept up-to-date and free from errors.
5. Choose a Mortgage Lender
During the home-buying process, you’re likely to work with a mortgage lender to help you to:
- Find the most suitable mortgage;
- Find a house appraiser;
- Apply for your mortgage;
- Work out your mortgage payments;
- Help you to qualify for your mortgage;
- Work through any challenges that may occur during or after the mortgage process;
Ideally, you’ll want to meet with many different mortgage lenders to compare rates and see what’s most suitable for your financial situation.
Think about the following questions when you’re choosing a mortgage lender:
- What experience do they have?
- What is the value they can bring?
- Can they answer your questions?
- Do they have any experience with your industry?
The Bottom Line: What to Know Before Shopping for the Home of Your Dreams
When you’re ready to start your search for a home to call your own, make sure to prepare yourself for the journey ahead. By understanding the home buying process and thinking through the various factors to consider before buying a home, you’ll be able to make a more informed decision and walk away with a property that is right for you.
Why Choose Finance Corp to Help Simplify the Home Buying Process?
All of the Finance Managers at FinanceCorp are fully qualified, trained, and experienced mortgage professionals who live and breathe finance. If you’re looking for a mortgage broker in Cockburn Central WA to help you choose the best loan option when buying a house, we’re the best ones to call. Get in touch with us at 08 9417 5550 to see how we can help get you behind the wheel of your dream vehicle!