Are you tired of rentals and having to make do with less than optimal properties and you think it is time to get on the property ladder? To ensure a smooth experience, here are important steps you have to take.
- Confirm the average selling price for comparable homes in your target area. “This is the best way to ensure you are getting a competitive price on your chosen property” explain Perth Home Builder.
- Work out the monthly mortgage payments would be if you bought today. There are many calculators online to help you calculate suggested rates for your region.
- Calculate the total costs for your housing each month. Apart from your mortgage costs, this will include taxes and home insurance. To know how much you have to pay on insurance, simply call an insurance agent for a no-obligations quote estimate after picking a property in your chosen area.
- Analyse your budget and then decide how the house will fit into it. It is recommended that buyers do not spend more than 28% of their income on housing. If you are spending more than 30% of your income on housing, you are in danger of becoming house-poor.
Make sure you can afford to buy a property
Don't get carried away with home hunting and the desire to get the best possible home. Affordability is a key issue and a mortgage will be in the most cases 25 years . It sounds obvious but imagine life with this payment requirement coming from your salary every month and how life will be.
Talk to reputable real estate experts in your area about what they think of the real estate climate. Find out what they feel about the rise or fall of prices.
Do not pull the trigger for home ownership until you are certain about footing bills for unexpected repairs. When they arise, you have to fully shoulder the costs as you no longer have a landlord to turn to. This can cause a drag on your bank account.
When you are certain about the numbers, you can then proceed to the property hunt. Here are some additional tips to guide you at this stage and ensure you find your dream property.
Confirm your credit standings. If you have poor credit and you do not have adequate funding for a down payment, you may not be able to actualise your home ownership dreams. Get your credit report and settle any unsolved issues.
Put your documents together. A lender will request for pay stubs, bank account statements, tax returns as well as names and addresses of past landlords over the last two years. Most lenders have their document requirements but you need to have as many as possible handy.
Get preapproval from lenders. With it comes some leverage in your house hunting. You can start from your current bank or local credit union when seeking preapproval. Apply to multiple lenders at the same time as it increases your chances of getting the best possible rates without affecting your credit score.