Are you planning to buy your dream home? The feat of buying a home could be tedious and stressful unless you are well versed with the facts that to be known before taking the leap of faith. Nevertheless, your dream home is the most prized possession that you could ever achieve of. Your home is your pride, emotion, happiness and style statement. You must not leave any stone unturned to turn your dream into reality. Buying first home is not something one can take decisions easily. You must take sound decisions for making your home buying experience a rewarding one. The more you know about the real estate industry, the better you can decide.
This article is trying to throw lights on the things a new home buyer must consider before buying a home.
Get Your Finance in Proper Shape
Try to determine what your credit report and credit score is and if any inaccuracy is there, ensure to mend it. Not to mention, your credit score is the primary yardstick to measure your ability to borrow money. The more your credit score, the better will be the chance to secure your home loan. A credit score is a numerical number that evaluates a person's creditworthiness. The calculation of credit score is done on the basis of his credit history. It reflects how much money you owe and your punctuality in paying bills.
More often than not, lenders are likely to look at four Cs factors of credit- credit history (timeliness), collateral (the value and condition of assets), capacity (income versus debt) and capital (down payment amount). It makes sense to keep your finance in sound condition before buying a home.
Get Your Down Payment Amount Ready
When buying a home, you must pay an amount in cash towards the purchase price. The amount of down payment is not included in the loan you are going to borrow from the lender. Apart from down payment, you should also get ready to spend an extra amount (which is called closing costs) over and above the purchase price of the home. In general, both down payment and closing costs have to be paid upfront. However, there are various loan programmes of non-financial organizations which allows you to borrow the entire or some part of the down payment amount.
It is always a wise idea to save money in liquid form for paying the down payment. While some non-banking organization may offer home loan even if your downpayment is under 10 percent, saving a considerable amount as much as 20 percent of the home purchasing price can be beneficial.
Get Your Home Loan Finalized
One of the critical elements of buying a home is finding the right home loan product. It can be the trickiest job if you do not have adequate knowledge about this aspect. You must ensure to consider issues like refinance cost, repayment flexibility, loan terms, fees, fixed or variable interest rates, etc. Many novice homebuyers are likely to consider only the interest rate aspect when it comes to finalizing a home loan product. You can also take the assistance of loan officer or financial advisor to assess the various factors favorable for a right home loan. You must ensure to consider a few crucial elements like refinance costs, repayment flexibility, fixed or variable interest rates, fees and loan terms.
Get the Market Research Done
It makes sense to have an in-depth idea about the locality you are going to invest for your property. The more you know about the market in the area you are interested in, the better will be the decision for your future. Being a savvy home buyer, you would be able to spot the best property as per your requirements. Besides considering the location, ensure to take the factors like rental returns and social amenities like school, hospitals, shops, transportation and so on into your consideration. Once you are aware of these facts, you would be able to determine the long-term potential capital growth opportunity of the property you wish to buy.
Home hunting becomes relatively easy when you consider these facts as mentioned above in mind. These could also help you to become a savvy home buyer. Since it is a lifetime decision for many of middle-income homebuyers, it makes sense to decide after doing enough research on this matter.