Summary: What are some essential tips for new home buyers? Read on to find out!
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endorsement of any kind except I thought it was worth reading.)
Buying your first home or first investment property is a huge responsibility. Your personal financial future is often heavily invested in the value of your home. While a real estate agent can guide you through the process of buying a home, having a bit of knowledge beforehand can really help you avoid many of the costly pitfalls new home owners make.
Buying your first home or first investment property is a huge responsibility. Your personal financial future is often heavily invested in the value of your home. While a real estate agent can guide you through the process of buying a home, having a bit of knowledge beforehand can really help you avoid many of the costly pitfalls new home owners make.
Here are nine essential tips for new home buyers:
- Know Your Limits
Before you do anything, you have to know how much
you can afford to pay. While you can easily get this information from banks and
lenders, you should always have your own idea on what you can afford. These
institutions don’t always have your best interests in mind. They want to maximise
their profits and don’t always consider how much of a burden a large mortgage
is on a new home owner. Also, be conservative when you estimate your financial
strength.
- Determine What You Want
Once you know what you can afford, consider what
kind of property you want to put your money towards. Do you want an inner city
unit? Do you need to be close to public transport? Would you prefer a large
country house? Figure out what you’re looking for first so you don’t end up
wasting your time especially if you are considering it as a property investment now or in the future.
- Buy Smart
Always use common sense when buying a home. While
you might fall in love with a certain property, it might be impractical to
purchase it. Always use logic when determining what home you need to buy so you
don’t inadvertently sabotage yourself.
- Don’t Overlook
Once you’ve found the home you want, stop looking.
Prolonging your search can hold you back. As a first time home buyer your
resources are generally limited. Don’t dawdle.
- Save for Twenty Percent
Although there is the standard minimum requirement
for borrowing money for a property, you should always aim for at least double
that figure. Twenty percent is a good, safe figure to aim for. Not only will
you save thousands of dollars in interest in the long term, but in many cases
you will be able to receive a better mortgage.
- Remember Closing Costs
Many first time home buyers often overlook
potential closing costs. There is a litany of costs involved. Taxes, real
estate agents’ fees and appraisals can quickly add up.
- Get Pre Approved
Make sure you are pre-approved for your mortgage
before you start signing off on any deal. The last thing you need to do before
your closing is to scramble for financing. Make sure this bridge is well and
truly crossed.
- Calculate Moving Expenses
Depending on where you plan to move, moving
expenses can be quite significant. A move down the road isn’t too bad but if
you are moving to a different city, expect to spend some serious money.
- Furnishings
First time home buyers often go over budget,
leaving them with very little in disposable income. They soon find out that,
although they have a beautiful new home, they cannot afford to buy furnishings.
Remember, you need to fill your home.
Buying your first home can be intimidating, but
with these nine tips the process should be a whole lot easier to understand.
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