Buying a new home can be a long, complicated and often stressful experience. With these simple tips, the process of purchasing a new property can be a little less stressful and even save you money in both the short term and long term.
Determine What House You Can Afford
The first step you should make when starting out in the buying process is to determine the exact budget you have and put a top limit on it. Before getting emotionally attached to a house it is important that you financially can afford it. Check you monthly income and outgoings and try not to go higher than 25% of your monthly take-home pay. In order to check these figures use a good monthly mortgage affordability calculator like this before determining your budget.
Save a Down Payment
In order to get the best deal and save a whole lot of money in the long terms, it is important to save a down payment of at least 20% the final price. Tip: The 20% discount will save you from having to pay the private mortgage insurance (PMI), which can be around 1% each year. Try to save as much as you can for the down payment, this is highly recommend by financial advisors.
Include Closing Costs in your Calculations.
In order to complete the house buying deal, you will need to pay for the closing costs. On average, the cost of closing is around 3-4% of the purchase price. These include the following Appraisal, Home inspection, Credit report, Attorney and Homeowner’s insurance. For first time buyers this can often come unexpected but if you factor it in you won’t be surprised.
Make An Competitive Offer.
If you find the home that you can afford and want to make an offer, it is often important that you are preapproved for the loan. Whilst it might be difficult to know what to offer, this is the job of the real estate agent to give you expertise and advise. Go too high and you will overpay, go too low and you will not got get the house or even offend the sellers. During a hot market it is important to stand out, even a personalized letter might help your offer stand out among multiple bids especially if they are all around the same price.
Buying a house can be a complicated and drawn out process, even for those with buying experiences. If you have any feedback or want to comment on the above, we welcome them below.