Buying a house is one of the most momentous events in your life. It might even be one of the happiest. But if you are not careful you will end up like most people, who have probably made some mistakes when trying to buy your first home. Even after all these years, those mistakes can still crash your dreams. Here are some tips so you don’t make the same ones again.
- Get a Mortgage That You Can Afford
When you get a mortgage, you are supposed to prove that you can afford it. You can’t assume that you can pay it back and make it through a difficult economy without losing your house. Lender wants to make sure that you have the money to make the payments. So, get a mortgage that you can afford and feel comfortable.
- Don’t Buy a House With a High Loan-to-Value Ratio
You can’t just pick out the house you want and say, “I’ll take it!” Even if you have reason for wanting to buy a house, with a high loan-to-value ratio (LVR). Why not? Because mortgage lenders will only approve loans with a lower LVR, they will charge a higher interest rate to make up for it. The higher the LVR, the higher the interest rate, and the less home you can buy. If you can’t afford the house on the amount you have put down, you will lose a lot of money. You might even end up with a bad mortgage, which will end up costing you more in the end. Get a mortgage that is affordable to you but is also suitable for the type of home that you want.
- Research Home Buying Scams Before You Buy
Asking friends and family for loans, using fake websites, and even lying to the seller can all add confusion and stress that you feel when buying a house. All the stress and confusion can cloud your judgment and make you pay more attention to price fluctuations and financing options that you might never otherwise notice. Ensure that you are well-informed and careful before you buy a house.
- Get an Appreciation Chart and Know the Market Rate
When buying a house, make sure you are aware of the current rates and trends in the area. You don’t just want to know the average house price in your area; you will want to know the average sales price and the median (50th percentile). You can get these figures by looking up home appraisals in your area. You can also look up home sales in your area on real estate websites and see the market trends. Keep in mind that the appreciation chart shows the price change, not the total price of the house. So, if you are looking at a house and it goes up in price, you are buying more than one unit because the price of the home goes up and the price of the condo goes up as well. If you are buying a house, it is important to know the total cost of the house, not just the price change. Knowing the market rate will help you find a house that is right for you without paying overpriced premiums.
- Don’t be Afraid to Negotiate
When buying a house, you will want to know what the seller is willing to give you. Ask them how much they are willing to lower the price of the house and even if they are willing to accept less than your asking price. It is important to know what you can get in terms of financing and how much that will cost. Negotiating for a lower price on a house can save you thousands of dollars in interest payments over time and make the process go faster for both you and the seller.
The process of buying a house can be overwhelming and confusing. There are so many different aspects to take into consideration that it can be hard to know where to start. However, the most important thing you can do is to get yourself ready by doing your research and following the tips above. With a little bit of luck and some hard work, you will soon own your dream home.