So, all set to buy a house? We all dream to own a house and it is considered as one big achievement in a person’s life. It is one of crucial and important financial decision that every goes through at least once in a lifetime. Landing in your own house from here would not be relaxing process, as it requires to find a house which is best for you and analyze carefully all the factors involved in making financial or non-financial decisions.
Here I am going to list down 10 important factors to consider while buying your first home.
- Do you have sufficient finances?
Buying a first home is not a single activity, there are many financial commitments that pops up as soon as you get into the deal. Decide carefully how much you are bound to spend on all the dependent requisites. You may either choose to finance your house or invest your savings to completely pay to purchase your house. Whatever the case, may the availability of liquid fund is import for all the following activities-
- Making a down payment
- Purchasing a housing insurance policy
- Paying off monthly installments of mortgage
- Spending on service charges and tax
- Your hosing maintenance charges and miscellaneous costs
- Keeping a small portion of buffer towards miscellaneous costs is important to avoid any last-minute surprises in your closing your deal.
- Have you got a trustworthy real estate agent for your deal?
Real estate agents are those who are responsible for promoting, generating lead and informing prospective clients about the seller’s or builder’s property. They are offered brokerage and commissions for converting the deal. However, you would be approached by many agents who would claim to be reliable and trustworthy. Don’t just get carried away by their words and try to do some background verification from your end as well.
Also, the important point is – never get agreed for paying commission or brokerage while buying your first home. Few, real estate agents may try to get the benefit from both the parties.
- Have you identified the best mortgage products?
There are verities of mortgage products available in the market, few of them may suit best for your need and requirement. Look out for different kinds of products and offers and find which one involves lower cost and high flexibility to you. Since, mortgages are generally a long term commitments, we need should carefully decide as to which one has the best features as per our need and comfort.
- Have you decided the location of new house?
Deciding the location of your new house is very important and involves lots of predictions. When you decide to build your house in a location, you are going to stay there for a longer period of time. Look for all the facilities and amenities that would accessible from your new house. The distance from schools, colleges, Hospitals, parks, retails stores, market and the traffic condition in the vicinity. Also, verify if your location of your new house is not flood prone or in danger of any natural or social threat.
You can visit various real estate websites to find best location for your new house. Real estate can also help you solve any queries related to locations of new house.
- Have any clue, how long you are going to stay in your new house?
Some people may choose to shift to different location for a job or for caring loved ones. However, if you know it earlier, you may plan your house accordingly. If you feel that you may have to change the location in near future, you can find a house which can appreciate faster with considerable amount of investment. You may park your luxurious needs for your next house after you decide to permanently settle down at one place.
- Have you decided the category and features of house you need?
Modern houses have got lots of variants and features, a big kitchen with a dining hall or a garden in the backyard or the top floor of multistory building. What pleases you the most, is important to consider before you decide to while buying your home. List down all the features that you like to have in your house and then decide which one suites best in your budget.
- Have you collected all your documents for mortgage application?
Before, getting into the final deal with an agent or the seller, arrange all the documents required to process your loan application. You can get the details on the list of required documents on the official website of the bank you are planning for the mortgage. Read all the terms and conditions of mortgage products by downloading e catalog or visiting the nearest branch. You may also contact the support services for any queries on the documents and mortgage products.
- Have you reviewed your credit score for financing your house?
Credit score is an important factor to decide the approval or rejection of your mortgage application. As mortgages involves long term commitment and huge money, financial institutions look for anything between above average to good credit scores. It also depends on your credit report and your repayment history. You can easily find your credit score online through various credit score checking websites to get an idea on your current position. If you feel that your credit score is quite low to qualify for a mortgage, you may look for other financial institution who can rather offer you a loan at a slightly higher interest.
- Are you comfortable with monthly EMI for your house?
Calculate your EMI online or visiting the branch, where you are planning to apply for mortgage. Various mortgage calculators and simulators allows you to reveal any hidden cost and derive overall interest, EMIs and overall approximate cost. You can also request to generate a dummy repayment schedule from your bank a analyze for each month how much you are paying towards interest and principal. These analyses will help you to identify and calculate all your financial commitments and you would free to change your decisions at this time.
- Have you decided the financial institution or bank to apply for mortgage?
Deciding your lender is a very important factor for a successful mortgage process. You may get there through referrals to get an extra discount on the interest rates or processing fees. A typical mortgage product involves lot of components, which involves huge cost. Verify all these carefully and choose the best lender for your new house.