Buying your very own home is part of almost every person’s 10-year plan. And why shouldn’t it be? There’s no better feeling than knowing that, at the end of the day you can go back to your own home without having to worry about paying that month’s rent. But buying a house isn’t an easy feat – in fact, it requires planning and immense budgeting. These 5 essential tips on how to buy a home will ensure that you’re financially prepared to buy your own home in 2018!
1. Keep a check on your credit scores:
Credit scores for securing a loan are as important as Uber ratings while choosing a driver! Always keep a check on your credit scores, because the higher your score, the easier it becomes for you to get a loan. In fact, keep your credit cards locked up while you’re trying to save for a house because overspending or untimely payment of your credit card bills can cause a hindrance when it comes to getting a loan. People with low credit ratings usually opt for subprime lending to get the house that they want.
2. Save for your down payment:
Usually, a house buyer has to pay around 20% of the total cost as down payment, and this bit usually isn’t financed by a bank. This way you’ll even figure out how much money you can easily put aside every month without having to keep a tight rein on your finances. This is one of the most crucial home buying tips because this will help you determine how much EMI you’re capable of paying every month! Since loans are a long-term contract, it’s best to choose an EMI option which you can pay comfortably every month.
3. Get pre-approved:
By getting pre-approval, you are not only giving yourself the nudge to take the big step of buying a home, but you’re also giving the seller confidence that you’re capable of buying. Real estate agents will also be more interested in showing you houses if you are pre-approved because that makes the process quicker and easier for them!
4. Decide a budget and stick to it:
It is important to look at houses which are within your price range instead of wasting time by going to open houses and real estate auctions which are not even in your budget. By knowing your budget beforehand not only you but even your real estate agent benefits– after all, there is no window shopping when it comes to houses!
5. Watch the market closely:
This tip is valid for both property rates as well as interest rates. There are certain months when there is cut-throat competition due to the surplus of supply, so the prices and interest rates are high. And then there is a time when the inventory, ie, houses for sale are limited, which is essentially the right time to buy. If you can’t read the market well, then look for an estate agent who will do that for you.
Lastly, be patient while looking for the perfect home and be smart with your investments.