A house is a lifelong investment. You want to make the right choice and ensure the money you invest is worth it. However, buying a home is not similar to buying a car or an expensive piece of jewellery. This type of purchase requires time and effort as it will be the biggest purchase you make during your lifetime.
At times, the steps to buying a house can feel overwhelming. This is because you are visiting several places, but will not always find a home that suits your needs. Don’t feel overwhelmed and stay optimistic when you buy your home. Think of it as your best investment and exciting experience. These essential steps to buying a house will help to remove the stress from the process:
1. Assess your finances before buying a house
One of the first steps to buying a house is to understand your financial status. You need to know how much of your income you can allocate to a mortgage. If, however, you have the full amount to buy the home, then don’t hesitate to do that. This way, you avoid the interest charges associated with your mortgage. Plus, you do not have to worry about rent, monthly mortgage payments or even a foreclosure should you default on any of the payments.
You also have to be confident that you can secure a mortgage before you start looking for your home. Knowing this information will help you in making the right decision on your home purchase.
2. Pre-approval mortgage
If you are unable to pay all at once, then your only other option would be to seek a home mortgage. Obtaining a pre-approval will tell you precisely the maximum amount that banks can offer as a mortgage. This amount will guide you when making a purchase. You can focus on the pre-approved mortgage amount to decide on your home investment.
3. Save money for your down payment
Down payments are part of the purchase. You will have to pay the minimum of 5% or 10%. You can pay more to lower your interest, but it may take you time to save that amount of money, especially when homes are expensive. Today homes start at $350,000 or $400,000 and above, which means you should have $17,500 or $35,000 available as a down payment.
As soon as you are pre-approved for a mortgage, work out your down payment. If you already having savings, then transfer your savings towards this payment. If not, start saving to ensure you can make your home purchase in a short timeframe as the value of homes keep increasing.
4. Research a real estate agent
A professional real estate agent can help you find the right home within your budget. Discuss your expectations, pre-approved mortgage and available down payment. This way, the real estate agent can get to work without losing time. They will help make the purchase of your home effortless.
The website of a professional real estate agent will always offer new listings, open houses, and the different types of properties available in various locations. They can even provide you with whether these properties have a neighbourhood night watch.
5. Keep within your budget
You may find homes beyond your budget and will want to consider them as a purchase. You can if you are able to seek additional finances. If you cannot, it can become disappointing as you really like a home and may not have the right amount of funds.
The best way to avoid a situation like this is to ensure you work within your budget. This means you should work within your pre-approved mortgage and your ability to make the down payment. If the home is a few dollars extra, you can always discuss it with the mortgage provider or bank. However, remember staying within budget will make the home investment possible.
6. Make a checklist of your home expectations
Think about all the comfort you would like to have. Do you want a four bedroom home with two full bathrooms? Would you like a house with a big garden? Do you want a swimming pool attached to the home? If you make a checklist, you can ensure that you are only visiting homes that cover your criteria. This way, the real estate agent will source homes according to your checklist as well as send you new listings that will match your checklist requirements.
7. Ensure a home inspection before buying a house
Never rush through the steps of buying a house. This means you should only make a payment after completing a full inspection of the home. This step can probably help to reduce the home price. Inspections can point out what improvements the house will need.
Tthe main reason for this step is to ensure you are not paying way beyond the actual value of the home. Without the inspection, you will be paying for the home and later paying for the improvements which can be costly.
8. Make the purchase
Although a home is a big purchase, it can be bought fairly quickly by other home buyers. You have to be fast with your paperwork, approvals and securing the necessary finances. As soon as you find a home that is well suited to your needs, make the down payment or a partial deposit to ensure the house is not sold to another buyer.