What to Look when Buying a House?
- 15 April 2017 | 52 Views | By Mint2Save
One of the most popular life goals around the world is buying a house. Considered as a milestone in one’s career and a symbol of great success, an idea of having own house always sparks imagination and excitement.
Fulfilling this wish are the real estate players who keep on working day and night to bring some of the best properties to us that have the latest facilities along with much needed amenities.
In proportionate to how huge this investment this, the decision making process is also very crucial and time consuming. In this article, we would explore vital points to always look into while buying a house.
1) Choosing the right property at the right price
First, it is very important to look for the type of home you want to live in and find homes that actually fall in your price range. After you are done with your budgetary concerns, choose a location, research on the amenities and safety in that area.
Since buying a house is a long time affair and is usually irreplaceable. So, make sure that you keep all the future prospects such as improvement in the house, extension in the house (like another floor), are always available.
It would be better to start looking at the bottom of your price range or even below your price range and work your way up.
That way, you’ll really appreciate say, $400,000 can get you that $250,000 can’t. Another point is, you want to do your own calculation because even the bank may say you can afford more house than you would actually be comfortable paying for.
Whereas the bank will ask for very detailed financial information when you apply for a credit, the bank will not know the amount of quite a few costs that eat into at your disposable income such as how much you spend on gas, what your health insurance premium is, if you’re a diabetic patient, your medical costs, what your water bill is ,etc..
The Bank wants to know about your monthly debt payments like student loans, credit card payments. Four main components of your home payment are: property, interest, taxes and insurance and any amount that you are legally obliged to pay. You should make sure that you don’t borrow more than your budget and your financial situation. So choose right house at right price and even at right time.
Some other factors to consider before buying a house that includes; the type of loan you want, your credit score and how much you want to spend.
a) Type of loans
When buying a home, you have a only some options for the type of loan you want to use. Some of these include fixed-rate home loan, adjustable-rate mortgage and interest-only home loans and even more other options. It is though important to select the suitable option while buying a home.
b) Credit score
Additionally from the type of loan, you must review your credit score before purchasing a house. Your credit score helps creditors to verify your creditworthiness. For example, if you have a credit score below 600 then expect to be offered a higher interest rate on your loan.
You might not qualify for a home loan at all if your credit score drops low. The best credit score for buying a house is above 650. Consider improving your credit score first before trying to buy a house. Lower interest rate helps to save your money in the long term.
c) Search for House or House price
Take a look at the price of the houses existing in that area where you want to purchase. Compare the prices that you find suitable according to your budget and decide what house you can afford.
The higher the price of the house you want to purchase, the more you can anticipate paying on a monthly basis. Always keep your budget in your mind before looking for the home.
Keep in mind to think about your needs, too.
d) Start saving for a down payment.
In addition to house price, you should also save sufficient for a down payment of at least 20% of the home price to rip the mortgage terms. Start saving for the down payment as soon as you are buying a home.
2) Work out the true cost of buying
It’s not very simple. You cannot just get a mortgage, get the keys and, you’re in!! Buying a home’s has difficult yet not so easy as it almost guaranteed to cost more than you think. The True cost of buying would include any interiors you want to do in the house, the cost of shifting, the fee for new electricity, water and telephone connections, amendments in your address IDs etc. These plenty minor expenses are indeed time and money consuming.
3) Make an offer:
Once you find the house you want, then start your bid rapidly. If you’re working with a purchaser’s broker, then get advice on an initial offer.
There’s no perfect system for bargain for a fair price, though you can keep the track via newspapers and local real estate market advising companies. The best is to deal directly with the seller by yourself. More often it’s better to work completely through intermediaries.
This is the valuation fee that the lenders (banks) charge to check the property exists and check that it also offers enough security for the loan. The cost may differ according to lender and purchase price.
Mortgage arrangement fee
Expect to pay your lender the agreement fee, which in some cases this is non-refundable, even if the purchase falls through.
When you go for your purchase of the house, it might contribute legal fees, which, like the valuation fee, is mandatory.
If you buy a property you’ll have to pay stamp duty land tax on it’s acquire price. The simplest method to find out how much is to approach the government authorities and figure out how much amount of stamp duty has to be paid.
Loan application fees
When you buy a house and take a loan for it, then you will be charged loan application fees.
Enter into the contract when you finalize your house. Make sure you have your paperwork in order. Many banks recommend to take professional service or even hire a lawyer that may check the contract for any discrepancies. Since banks are usually known to have a whole panel of well qualified lawyers, people often prefer to approach for the prime reason of a transparent contract too. In this case, loans become their secondary goal. Complete your investment loan approval by contacting your mortgage adviser with all details of the property.
Buying a house is a very tangible indispensable investment. People do not want to let go of their homes ,even in the times of financial difficulties. A house is not just a brick and mortar building that gives shelter to a family. It is a huge closet of memories, a safe harbor to make us feel in our hard times. We never make something so important get to us so quickly. The more time you take to decide, the better decision you make, as once you purchase a house, there is no turning back. Most important, do take an insurance for your mortgage loan.