Buying a home can be an exciting endeavour, especially for first-time buyers. It is also likely to be one of the biggest financial investments you’ll ever have to make, so obtaining as much knowledge before dipping your toe in the water is essential.
If you’re looking at buying property, here are a few tips to guide you throughout the process and help you make informed decisions, not impulsive ones!
#1 – Research early
One of the common mistakes homebuyers make is not doing the leg work well in advance. Researching the market early on can prevent you from making decisions that you regret later. As soon as possible, start checking online platforms such as Domain and Realestate.com.au, and make shortlists of any houses you are interested in. Monitor how long they are on the market and find out what prices these properties sold for prior.
Importantly, make sure that yourself, and anyone else you are buying with understand and agree on the features you want in the home and the type of neighborhood you want to buy in. If it’s your ‘forever home’ you’re buying, think long-term. You should see if you can envision yourself living your golden years in that area.
Lastly, before committing to any purchase, visit the suburb on different days and times and check if there are essential establishments nearby and what the other residents are like. Remember that you shouldn’t focus only on the house but also on the surroundings.
#2 – Determine your budget
Before you go house shopping, figure out how much you can realistically afford. To help you come up with a figure you are comfortable with, platforms like SoFi can help. Keep in mind that the cost of buying a house goes beyond the price it sells at.
Aside from the monthly mortgage amount, you also need to factor in expenses such as homeowners insurance, move-in fees, property taxes, insurance premiums, association dues, and other applicable housing charges. Make sure you have enough wiggle room to cover unexpected expenditures.
#3 – Build your credit
Your credit score will be one of the determining factors whether you qualify for a mortgage loan. It will significantly influence your loan terms and interest charges. Before starting the home buying process, you should make sure your credit is of good standing and take necessary steps to strengthen it if need be. You can do this by:
- Getting copies of your credit report from the three major bureaus and disputing any discrepancies
- Paying your bills on time
- Making sure your credit card balance is way below the credit limit
- Not taking out any other loans
If you already have excellent credit, do your best to ensure that it stays that way.
#4 – Take advantage of open houses
Now that you have developed a working budget, you can check out all the houses within your price range! Make the most of open houses, whether online or in person. By looking at different properties, you will be able to filter out the elements you don’t want in a home, and add in some that you do want.
When touring houses for sale, make sure to ask when and how the house was built, the age of the roof, the last time the plumbing and electrical systems were replaced, and other housing inquiries you may have. Even if you feel that your concern may be irrelevant, don’t hesitate to bring it up. Crucially, pay close attention to the overall condition of the home. Take note of any unusual smells, visible stains, and damages both on the inside and outside.
#5 – Go with a reliable lender
Ideally, you should find a lender before you start house hunting. Talk to several lenders and explore the different mortgage options they offer. A reliable lender or mortgage broker can help you with this process, so make sure that you find the one that can work with your terms.
Importantly, once your loan parameters are established, stick within your budget to avoid any financial stress along the way. Plan your budget carefully and use a home loan repayment calculator if ever you need to know how much your repayments will be if you need to get a new home loan.
Securing your dream house takes time and effort. Remember to plan carefully and get as much information beforehand, so you can make a well-considered decision and not an impulsive one.