Buying a home is often a taxing process and it is often a lifelong investment. You can understandably be nervous when considering the various factors involved as getting it wrong can be a very costly process. What are some of the points you should consider before purchasing a home?
Spend within your means
Set a budget and stick to it at all costs. Don’t buy a home with your expected future income in mind but with your current income in mind. This is probably the most important factor but, it is also the most likely to fall on deaf ears. You could also buy less than what you can afford so that you don’t go broke during purchase. Ideally, you should be able to cough up at least a 20% down payment off the bat and your mortgage should not exceed one-third of your annual income.
Extensively research prospective homes
Before purchasing, you should ensure that everything about the home is in perfect working condition or you should be aware of all possible defects. Personally, evaluate the real estate prices in the area and map out the trends. This will allow you to understand the real value of a home. You should also get competent inspectors to thoroughly inspect a home before purchase.
Don’t rush the process
Have a thick skin and don’t get pressured by catchy lines such ‘this is an unbelievable deal’, ‘best mortgage rates EVER’ etc. Real estate agents will pressure you to make the purchase, but don’t get rushed. Do it on your own time and conduct a great deal of research. Don’t allow a stranger to pressure you into making a lifelong commitment without your full backing. Don’t get disheartened if the process takes a long time as it is better to wait for the right opportunity than potentially making a costly mistake.
Sort out your finances
Get your finances in order and ensure that you get the best possible mortgage rates. You should take steps to increase your credit worthiness such as paying your bills on time and avoid making big purchases. Save up for your down payment and the more you save, the better.