A Guide To Buying Your First Home
Everybody dreams of owning a home at some point. However, you need to be prepared for it both mentally and financially. Don’t just buy a house because everybody else is doing so. Buy a home because you feel you need one and you want to be a homeowner but don’t buy it because somebody else is telling you it’s a great idea.
Below is a guide towards a successful home buying process.
1. Buy when it’s the right time
As mentioned, buying your first home should be something you have been planning for. A house needs you to carefully analyze your situation and decide if it’s indeed the right time to make the purchase.
What’s your profession? Are you self-employed, employed, or a digital nomad? You need to be sure that you will live there for at least five years. If you are a digital nomad, that means that you have no permanent residence, you keep traveling from one country to another. This is then not a great time to purchase a home because you are always on the move.
2. Can you afford the house?
Finances are everything to do with getting a permanent residence. Purchasing a home involves applying for a mortgage. There is a whole application process involved. You have to see if you qualify or not.
How is your credit score? You need to have a good credit score before applying for a mortgage because if it is poor, you may not qualify for a mortgage. With the competition in the industry, more home loan lenders are coming to offer competitive rates. For example, this review by Crediful.com on Lenda, a home loan lender is quite enticing. The company is a direct lender, and they even accommodate self-employed people as long as they have been filing tax returns for at least two years. They allow people with a credit score of 620 and above.
Look at your finances and see if you have any other debts that may prevent you from affording the house. Pay them off before taking on a mortgage loan to avoid foreclosure.
Also remember, even as you qualify for a mortgage, you’ll need some cash that will act as a downpayment for the house.
3. Go house hunting
Also, before you apply for a home loan, you need to identify what type of home you want. Do you want a house in Abu Dhabi or Hawaii? Get to the field and see the open houses and get a feel of how they are. You also get to know the price range to see what you can work with.
Do prior research on the safest neighborhoods and look at the availability of amenities such as hospitals and schools. Get a feel of how your preferred place would feel and then make a decision if you still want to leave there.
4. The home buying process
After you have surveyed, there is the buying process now. Here are some essential tips on buying a house.
Mortgage application
The first step towards getting your ideal home is a mortgage application. You go to your preferred lender and apply for a pre-approval. Here, your financier will retrieve your credit score and other necessary documents and will give you an estimate of how much mortgage you qualify for.
Making the offer
Once you get a pre-approval, you then proceed on to hire a skilled real estate agent who will be able to cut you a good deal. After you have identified the perfect home, you make an offer, then the seller counter offers. This then leaves room for negotiation then if you agree on the price, you can proceed on to the next step.
Escrow Period
The escrow period is the time between the seller accepting the offer and the closing date. The timeline of this is usually between 30-60 days.
During the escrow period, this is the time where you go back to your lender to finalize the loan. It is important to note that it is not guaranteed that you will get the exact amount your financier had quoted during pre-approval, it could be less or more.
You also need to do a home inspection thoroughly before finalizing the deal and see what repairs are necessary. At this point, if the house has any issues, you can negotiate lower.
From here, you will need homeowners insurance. Scout for an insurer who does a full assessment of the house before giving a quote of how much premium you’ll be paying. Your lender will need this quote before closing. Lastly, are the closing costs, which generally go up to 6%.
Owning a home is a process that needs patience and prior planning to get better deals. The idea is getting a deal that you’ll be proud of even as you pay off the loan. The guide above should help you in making necessary steps towards having your own house.
