The process of buying a home may seem complicated, especially if it is your first time. Between finding the perfect house, understanding property taxes, signing up for a mortgage, and closing the deal, it is reasonable to feel overwhelmed. However, worry not, for others that have come before you have made it. Before anything, take some time to familiarize with the steps it takes to purchase your first home.
1. Research early
Start going through listings, newspapers, magazines, and websites the moment you decide on buying a home. Take note of the specifications you are looking for and see if you can find a house in the market. Check the price range of your ideal home. Doing sufficient research will give you a sense of the housing trends.
2. Review your financial health
Before you fall head first for your dream house, audit your finances. Ensure you have at least six months of living expenses saved up before you consider buying a home. Consider how much will be left in your account once you pay the down payment. Determine how much you have left every month that you can direct towards settling the mortgage payments.
3. Determine your budget
Experts recommend that you don’t buy a house that costs more than five times your annual income. Contact conveyancing nsw for advice on setting your budget and finding homes within your ideal range. Remember that your affordability should be determined by your current financial situation.
4. Save for a down payment
Most lenders ask for 20 percent down payment, but others allow much less. However, the lower the down payment amount you give, the more the mortgage you will require, which means you will pay a higher interest rate. That is why you should strive to gather as much down payment as possible. Some tips to help you save up include setting aside your work bonuses, collecting your tax refunds, and using automatic savings plan to track your progress.
5. Research federal, local and state assistance programs
Many federal, state, and local programs offer financial help to first-time buyers. They give perks such as closing cost assistance, discounted interest rates, and tax credits. Your municipality might also have such incentives that you can qualify.
6. Find a mortgage lender and get pre-approved
Before you start scouting for your first home, you should get pre-approved. Many real estate agents do not take clients to view houses until they have a pre-approval letter in hand. Getting pre-approved means that the lender has verified your income, checked your credit, and analyze your bank statements and concluded that you qualify for a mortgage.
7. Submit your offer By now, you already know how much loan you qualify and spotted the house you wish to buy. You can now give the buyer a proposal to initiate the negotiation process. Once they accept your offer, the seller will provide you with the keys to the house, and you will pay them the agreed amount.