10 Things to Consider Before Buying a House
Like every decision you make to buy or sell something needs preparation and a good thought process, so does buy a house. You cannot just think one day of getting a new house and will be sitting in a new house the next day. It needs to be thought and planned properly. Several things need consideration. You enter some houses to your list and reject others.
With so many points and agendas in mind, you are often stressed. Buying a house needs to be a step by step process, and planning for it has to be the first thing. If you are getting a house for the first time and are not sure what to do before buying a house, this article is for you!
We have listed down top 10 things to consider before buying a house and so, make sure you have a checklist with you.
1. Visit a Mortgage Broker
The very first thing you need to do is visit a mortgage broker. Or if you think it’s not enough, you can visit two to three of them for general estimates.
A good mortgage broker will go around finding the best deal for you. On the other hand, banks only have to offer specific mortgage deals. The well-known ad well-reputed top mortgage brokers have good relationships with different banks and can find you a better deal.
They offer their products as well as dozens of others from different lenders they are professionally affiliated with. This ensures that you get the best possible mortgage. Also, a professional mortgage broker will clear the scenario for you. He provides you with all the options you can choose from.
For instance, whether you want to go for a fixed mortgage or a variable one? A responsible broker puts your benefits before his.
Moreover, you should discuss your needs and requirements regarding a mortgage to be clear about what they have to offer and what you can accept. It maintains good communication throughout.
2. Have a Good Look into Your Budget
Now here’s the most important thing. You must have a good look at your budget. Talk to your financier or if you do those roles yourself, make sure you do a good budget calculation. Minus all your liabilities such as car loans and credit cards from your assets that include your cash, investments, and savings. Investigate what’s left behind.
Now, this is what you will plan your mortgage according to. Remember that bigger the down payment, lesser the interest you need to pay in the long run. So you must factor in this fact as well.
Come up with a budget plan that allows you to pay your monthly down payment as well as manage your other financial needs easily.
You can also do this by consulting a financial advisor if you cannot find a way out of yourself. Make sure you contact a reliable one, though.
3. Think About the Mortgage Duration
Here’s another significant factor: mortgage duration.
Do you want to get done with a mortgage as soon as possible or are fine with long twenty or thirty years mortgage plan? All of the steps you take further will be based on the answer to this statement. The first thing it decides is the time you will take to pay off your amortization.
The second thing it determines is the rate of interest that you will pay over your mortgage during the mortgage’s lifespan. Remember that the interest rate is higher for a longer duration and is lesser if you pay your mortgage in a shorter duration.
Consult with the mortgage broker to know which will suit best to your budget and living expenses. If you are fine with paying smaller monthly payments with high interest for a longer duration, long-term mortgage plans go well.
However, if you want to save more and want to waste less of your money towards paying interest, consider a short-term mortgage plan and devise a financial strategy accordingly.
4. Decide Monthly Mortgage Payments Realistically
Shorter terms attract most of the people. Especially the ones who are looking forward to doing more savings and pay lesser interests. Before you decide something out of craze, it is important to be realistic for once and think properly.
You might be earning a lot right now, but what if you lose your job suddenly? Life happens. And so, there is a need to decide your mortgage plan realistically.
You need to make sure that you will be able to pay off your loans on time, if not within time.
This is also important to save yourself from breaking your mortgage because some serious penalties are awaiting otherwise.
How much money you possess today can, of course, provide a guarantee, but life comes with none. To keep lawsuits away, you need to have a good assessment regarding how much you can throughout the length of your mortgage with ease and convenience. Then, you can finally decide your monthly mortgage payments.
Oh, do not forget to add interest payments, though.
5. Check out Your Credit Rating
Credit ratings play an important role in getting reliable lenders and worthy products. Before you apply, it is a good idea to know where your credit rating stands and what has been the history.
Top lenders only deal with people who possess good credit ratings and a clean history. It helps them steer away from the loss they will need to bear in case the borrower is not able to pay the money back.
Your credit rating acts as a guarantee to your claim of paying back the decided amount on time. What you get in return is high-quality products and in this case, a house of your dreams.
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6. Deal with Real Estate Agents sharply
Real estate agents have good convincing powers. Before you know, you will be signing for what they tell you and show you.
Wait, you cannot do that. You need to assess the situation and circumstances on your behalf. Look into the facts and figures deeply. Make sure you commit to what’s written in the draft you are going to sign.
Visit the property a real estate agent has found for you. Investigate the pros and cons. A real estate agent is highly likely to show you just the pros and cover the cons sharply.
You need to be sharper. Yes, you! You are going to pay for the home you buy from your hard-earned income. Do not let anyone make it seem less significant. And so, it is important to dive into the details of the good and bad.
When you know what you are signing up for, you can take better decisions.
7. Research on Your End
Do some property research on your end. Take help from reliable real estate websites such as MLS.ca, Condos.ca, and Property.ca
They have well enough amount of information you need before buying a house. You can get a rough estimate of what costs how much. It will ensure that what you are paying for is worth it.
Moreover, it can help you have a look at the trends and architectural ideas. This is greatly helpful if you are looking for a brand new high-class house built in modern architecture. Or maybe you can change your mind while you research.
It makes sure neither your real estate agent nor your mortgage broker considers you a layman. They would know that you are well aware of how it works and how it has to be.
Overall, it is all in your benefit to do some research on your own. It can help you take better decisions wisely.
8. Here Comes Your Offer
When you have done some good investigation of your budget, mortgage plans, and property trends, you will be ready to give your offer.
By this time, you must have consulted a good mortgage broker and a real estate agent. Also, they have prepared you well about what should you finally go for. But what’s the hurry?
There’s never a single dictated plan over which you take some long term meaningful decision such as buying a house. You must talk to your broker and agent more frequently.
After measuring the words, the worth and your thoughts, you can give your own offer. If you are dealing with a broker and your real estate agent for some time now and have assured that you plan to buy, they will most likely agree to your offer or settle for one close by.
In this way, you can get the most out of your investment and the property you are going to buy. Financial decisions have to be done in a deal, and deals are finalized in a single run. It takes time, opinions, decisions, and everything else that matters.
9. Consider Closing Costs
Closing cost is another important thing to consider before you are about to buy a house. If you are not familiar with what closing cost is, read on!
Closing costs are the fee that is paid at the closing of a real estate transaction. Typically, homebuyers need to pay 2 to 5 percent of the purchase price of their home as closing fees.
For instance, if your home costs around $150,000, you might have to pay the closing fees somewhere in between $3,000 and $7,500.
However, when you have already involved a mortgage broker and real estate agent, they can help you get to a real estate lawyer. He can plan to cover the closing fees on the day of closing as less as possible. Generally, it is a good idea to put aside 1.5 percent to 2 percent of the purchase price as of closing costs.
Considering closing costs beforehand saves you from additional financial stress later on.
10. Relax!
You have done your job really well. Now it is time to relax and breathe. Only then, you will be able to handle further chores properly.
Talk it with your broker, take it on step by step and ask about everything that confuses you rather than stressing over it. We know it’s an exciting moment for you, but at the same, it is a bit stressful one. However, when you have gone through and considered all the above mentioned 9 things, nothing has to be problematic.
Taking this important decision and making a move should be fun. Involve your friends and family to double the joy and live the time!
By using a mortgage agent or mortgage broker from Citadel Mortgages, you will be able to ask all the questions you have and be ensured you get the best advice and mortgage product for your mortgage needs. Contact us here at Citadel Mortgages to become mortgage-free sooner!
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