You’re about ready to buy a house, and you’re very excited about it. Before you get out there and take a look, though, there are five essential things you need to consider.
Imagine finding your dream house and falling in love with it. Great, right? Until that is, the bank declines your request for mortgage financing.
Before you start looking, take a look at your finances. How good is your credit? Are you paying more than the monthly minimum on your debt? Are you using your credit facilities to the max?
A mortgage is a secured loan; you pay less in interest than a personal loan. It is still a lot of money, so every application is carefully vetted. We recommend speaking to your bankers and finding how much you
r qualification level.
The bank will give you an idea of the following factors:
The next thing to consider is the loan rate the bank will charge. If your FICO score is under 580, getting a mortgage is going to be difficult. The higher your score is, the better your chances.
But there’s a much more important reason for checking your credit. Having poor or fair credit means that you’ll pay a higher rate for financing. We’d recommend working on improving your credit before you apply.
Buying a home is an expensive task. You’re looking at conveyancing fees, registration fees, and other fees. These can add up quickly and could easily be thousands of dollars. Not all banks will allow you to extend the mortgage to include these costs.
There are plenty of ways to find properties to buy. You can choose to use a realtor, or see if there are private sales. Whatever you do, do some research before speaking to anyone.
Realtors are there to make money. They get their commission from the sale of a house. Some less scrupulous realtors will give you the wrong advice merely to move a place.
When dealing with private sellers, you also need to be careful. As homeowners, we tend to see our properties as more valuable than they are. Many homeowners will inflate the price of their home.
In this game, verify before the sale goes through. Do your research about property prices and how good an area is. We’d even say that all transactions should be contingent on a complete property inspection.
How many times have you heard the phrase, “It’s cheaper to own than to rent”? That might even be true, once you pay the mortgage. What’s also true is that a mortgage is a substantial debt to take on.
You need to be 100% sure that you can afford to repay it. If you need to rely on an increase coming later, you’re not ready to buy a home yet.
The dream of owning your own home could turn into a nightmare if you begin with no research. Take the time to do careful research, don’t overextend yourself, and work on improving your credit. This strategy will help improve your chances of getting the best deal