Become the master of your own domain with this simple, three-pronged strategy:
Building A Home-Buying Budget
One of the first and most important steps to buy a house to follow is to build a budget so you can get a clear picture of just how much house you can actually afford. This requires calculating your available savings as well as your expected income for the foreseeable future, while also taking into account the cost of maintenance and repairs, utility bills, and any outstanding debts you may have. The number you’re left with after that is roughly what you’re able to put towards acquiring property.
If your current budget isn’t sufficient for buying a home, it’s a simple matter to use the same calculations to figure out how much you can afford to continue saving. Traditionally, a down payment of a house is about 20% of the property’s sales price, so look at the cost of homes in the neighborhood you’re interested in and work backward from there. Saving to buy a house takes time, but proper planning can help fast-track the process.
Finding The Right House For You
When buying a home, it’s essential to not simply settle for the first house that you can afford. You have to make sure a property meets all your needs as well. One factor to consider is size; how much room do you need? Although single-family homes are the norm in many areas, duplexes, condominiums, and townhouses are also possibilities worth keeping in mind.
Another factor to consider is the neighborhood. If you’re raising children, you’ll probably want to find a property with good-quality schools nearby. You might also want to look into the local job market, economy, and crime rate. Last but not least, the condition of the house itself should be taken into account. Request a full inspection of the property before you buy. This way you know exactly what you’re getting yourself into.
Picking A Manageable Mortgage
Unless you are exceptionally wealthy, you’ll probably need to take out a mortgage in order to buy your chosen house. Just like with finding the right house, finding a mortgage that accommodates your financial and living situation is crucial. Also just like with finding a house, it’s not a good idea to settle for the first loan that you come across. Instead, go to multiple banks in order to see who has the most beneficial terms.
Note that even a single bank is likely to offer multiple different loan options, including ones with shorter or longer repayment periods as well as ones with either fixed or adjustable interest rates. The former will lock you into one interest rate for the life of the loan, while the other may increase or decrease depending on a number of factors. This represents a risk-reward system that could pay off in the long run, or it could not. Whether or not that’s manageable is a matter of personal preference.