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The following is a guest post. Enjoy!Â
Buying your first home is a big step and a huge commitment, both emotionally and financially. Below are 5 things you should consider before taking the plunge.
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Can you afford it?
Before you even start looking for your dream home, you need to determine exactly how much you can afford to spend. Financial experts recommend you plan for repayments on your home loan to be about 30% of your total income. You also need to consider loan fees, stamp duty, moving costs, and the all important deposit. This money should be in your bank account before you even think about applying for a home loan.
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Research, research, research
Now you know how much you can spend, you can start thinking about what you want to buy and where. Focus on the geographical area you’d like to live in, and research house types and costs as well as whether it offers the lifestyle you’re looking for. Then look at homes for sale in those areas to get a good idea of whether you can afford to buy there and still get what you want.
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The all important home loan
It pays to shop around to ensure you get the best loan for your situation. Do you want a fixed or variable interest rate, low deposit, a redraw facility? You need to consider the cost of the loan as well as the features which will help you to pay it back sooner. There are various independent home loan comparison websites available that can help you to get the best deal.
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Buying the home
How do you plan to buy your dream home? Private sale, through an agent, or at auction? Consider your options and what’s involved beforehand.
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Moving in
It’s moving day! Do you hire a truck and do it yourself or a full service moving company? How much can you afford and how long will it take you? Either way, make sure you’ve got enough cash in the bank to cover the costs.
How about you all? If you have purchased a home before, what is one thing that you figured out after the fact that you wish you had done at the beginning of the home buying process?
Share your experiences by commenting below!
Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.
- Looking back on my experience purchasing a condo, I think the most important step in the process was figuring out the finances, as that is really what drives the whole process.
- It’s important to be pre-approved for a home loan (not pre-qualified) that is sufficiently low enough to allow you to meet your long term savings goals while paying back your home loan.
***Photo courtesy of http://www.flickr.com/photos/stevendepolo/3608960341/sizes/o/in/photostream/
