Buying Your First Home: A Step by Step Guide
Buying a home is a big step, and one that not everyone can take at the same time. However, it’s also the perfect opportunity for you to invest in your future and gain equity in something other than your local pub or café. Perhaps most importantly, buying a home is cheaper than renting for an extended period of time. It’s important, therefore, to have a plan when you begin looking for properties, as houses don’t tend to fall from trees. Preparing to buy your first home will require some research and organization so that you are equipped with everything you need once that perfect property comes on the market. Here is our ultimate step by step guide to buying your first home…
Know your financial limits before you begin
It’s important that you research the cost of mortgages and a wide range of home prices so that you can make an informed decision as to where you begin your search. Consider all costs involved in buying and owning a property, such as the deposit, mortgage interest rates and insurance. You will also need to factor in how long you plan to stay in the property for your budget to be accurate, as you will have to sell it one day and that will incur additional costs. If you are a first-time buyer, you may be eligible for a government-backed scheme that allows you to borrow a larger amount than you would usually be eligible for. This is a great way to get into the market and start building equity.
Research the type of home you want to buy
When you’re ready to start looking for properties, try to narrow down the type of house you are hoping to buy. This will make the process go a lot smoother, as it will narrow your search and help you to visualize what potential houses will look like in a neighbourhood of your choice. The type of home you buy will be dependent on your budget, available financing and personal preference. If you plan to buy a house with a mortgage, you need to make sure that it’s a repayment mortgage. This means that you pay off your interest and the principal amount on a monthly basis. If you are planning on renting out a portion of your home, you will need to buy a capital repayment mortgage. This type of mortgage covers only the amount borrowed, while the interest is paid by the person renting out the property.
Decide on a neighbourhood and find a real estate agent
Once you have a type of property in mind, it’s time to select a neighbourhood that meets your needs and has properties that fit your budget. This will help you narrow the list of houses for sale down to a select few. It’s important to remember that a neighbourhood can change over time, so make sure you check it out and see what kind of area it is before making a final decision. You should also keep an eye out for the crime rates in the area; they’re usually easy to access online. When it comes to finding a real estate agent, you want to make sure that they are a good fit for you. Check their website and social media pages to see if they are someone you can trust with your dream home. You also want to make sure that they specialize in the type of neighbourhood you are interested in, as this will help you to avoid wasting time on properties that don’t fit your needs.
Get pre-approved for your mortgage
If you are hoping to get a mortgage, this is when you will want to get pre-approved for one. A mortgage broker will be able to assess your financial situation and let you know if you are eligible for a mortgage and if so, how much they estimate it to be. If you are pre-approved, this will make the process of buying a house a lot easier, as you will be able to see how much money you are able to borrow. A good mortgage broker will take the time to understand your situation and goals so that they can suggest the best options to fit your needs. Make sure that the mortgage broker you choose is registered and regulated with a financial institution so that you can trust them with your financial situation.
Determine how much you can afford to pay each month
Once you have a mortgage pre-approval in hand, it’s time to sit down and determine how much you can afford to pay each month. This is important for a couple of reasons. Firstly, it will help you to avoid going over your budget and getting into trouble with your bank. It will also help you to avoid missing payments and incurring any late payment fees. It’s a good idea to sit down with a friend or family member to help you figure this out. You may have some idea as to how much you can afford to pay each month, but it’s always best to play it safe and err on the side of caution. The last thing you want to do is get yourself into financial trouble before you even move into your home.
Conclusion
Buying a home is a big step, but it can also be a very rewarding one. It’s important to remember that there are a lot of different factors to consider when buying a home, so you want to make sure you are prepared and ready to tackle each one of them. The best way to do this is by knowing what you want and having a plan to get it.
