So you have decided to buy your first house, now what? Like almost every person, prepare yourself for an overwhelming experience because most probably, you have no idea what the requirements, process and other challenges you will face in purchasing a house.
The common mistake people often make when buying a home is jumping on the first offer or house that’s closest to their price range. On the other hand, some people would rather continue to rent because they do not want to deal with the whole process.
Here are a few things to consider before making your first house hunting move:
Consider creating a plan.
As mentioned above, you probably have no idea where to begin, but at least have a goal in place. For example, lay down your future goals or what you think will happen in the coming years regarding your career, lifestyle and of course, finances. Then see how home ownership will fit in your plan.
Should you go for a fixed or a variable rate home loan?
First off, if you are capable of paying in full and you are confident that now is the best time to shell out a large amount of your hard earned money, then by all means, do so. Forfixed rate home loans, as the name suggests, means the interest rate of the loan doesn’t change during the prescribed period of the loan, this enables borrowers to compute the exact amount of their future payments properly.
As for thevariable rate home loans, the interest rate is subject to change which then affects the amount of the monthly payments – reflecting the new interest rates. It is more preferred by new homeowners as it is easy on during the first few years of the loan. But once the introductory period ends – depending on the market, rates can either remain low or skyrocket, which will then make it hard for borrowers to keep up with the higher monthly payments.
Speaking of loans, get one ahead of time.
Making an offer without a financing plan in place is a very risky move, which is why getting a loan pre-approved in advance can help you gauge how much you will end up spending. In addition to securing a backup, many sellers ignore buyers who haven’t secured a loan because this doesn’t assure them that who they are talking to is actually capable of financing the house they are selling.
Consider hiring an agent.
A buyer’s agent might be an unnecessary cost for some, but if you want to do the work yourself and go to open houses and dig deep into the digital world of real estate, then go for it. It’s just having an agent speeds up the process by pairing you with choices according to your specifications and desired rate. Moreover, they are well aware of the properties that are not yet available in the market but are perfect for you. Lastly, they can help you too-good-to-be-true properties so you can move on or make an offer.