So, you’ve finally decided to take the plunge and buy a new house for yourself and your family? Well, congratulations!
Now, before you get started and make any major decisions, it is crucial for you to understand how to approach the entire home-buying process. From picking the right neighborhood to deciding on the best financing option, home-buying isn’t easy.
The housing market is very subjective to your needs and preferences. A picket-fenced house in an upcoming urban suburb area might be the most cost-effective and convenient option for others, but it wouldn’t necessarily suit all your needs.
To help you out in such exciting yet stressful times, we have prepared a comprehensive and well-detailed home-buying game plan. This game plan will help you evaluate all your options thoroughly and enable you to make a smart decision.
Wondering where and how to get started in the home-buying process? Let’s have a closer look.
Should you really buy a house?
Before we talk about the ultimate game plan to buy a new house, you must identify if you really should buy a house or not. Here, we are not just talking about your financials but your motive towards buying a house in the first place.
Are you buying a house because you don’t want to deal with landlords anymore? Do you want to buy a house as only an investment option and aren’t looking to live in it? Are you planning on keeping your old house and buying a new house just because you like a new property?
Figuring out your motives is key before you plunge headfirst into the home-buying process.
Determine your budget
You must zero in on a single figure, which will be your budget. It’s very tempting to look for houses immediately without first setting a budget. But this can lead to disappointment if you fall in love with one you can’t afford.
While it is important that you feel good about the house you buy, you must also keep your financial status in mind. List down all your expenses in a month and determine how much money you save.
Next, figure out how much money from your savings you can put down towards the monthly mortgage payments. Accordingly, you will then be able to finalize your mortgage loan amount.
As a golden rule of thumb, it’s usually suggested that your monthly mortgage payment should ideally be about 30% of your total monthly income. Figuring out your budget this way will also help you shortlist all the neighborhoods that will suit you the best.
Get a mortgage pre-approval
Most homebuyers tend to put this step on the back burner or overlook it completely. However, if you are looking to make a smart investment decision regarding a new house, it is crucial that you prepare your finances and get yourself pre-approved for a mortgage.
Be sure to shop around for your mortgage loan. Terms such as interest rates and down payment requirements can vary across banks and lenders.
Getting pre-approved helps you gain a secure footing when looking for a house and makes you a top choice amongst home sellers. Check your current credit score and figure out how to improve it.
Save as much money as you can for a down payment, get your documentation in order, pick a mortgage plan that suits you best and finally get yourself pre-approved.
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Calculate your complete housing cost
Often, homebuyers only focus on paying the purchase price of the new house. However, when buying a new property, there are numerous other hidden costs that you must be aware of and budget for.
Other than your monthly mortgage payments, you must also have enough money to pay towards the maintenance of utilities in your house.
There are also house-related taxes that you will need to pay once you get possession of the house, as well as monthly contributions towards homeowners’ insurance. This total amount will change if the house requires ongoing repairs.
Assess the house thoroughly
A house might look like a dream at the face of it, but you must look at it from all sides. Here are the important features to consider in a house:
- It’s located near supermarkets, hospitals, social scenes, etc.
- The house is in a safe neighborhood where crime rates are low.
- The house’s size fits your needs completely.
- It doesn’t require a lot of repairs or maintenance.
- It has amenities like a large kitchen, yard, multiple bathrooms.
- The house gets ample sunshine and ventilation.
Not everyone wants or needs these features, but they are currently the most sought-after aspects.
Your home inspection is an important part of the home buying process. Be sure not to skimp on the home inspection. Hire a knowledgeable person with excellent reviews.
A good home inspector will find issues that may need immediate attention and you can be sure to consider these issues when preparing the purchase contract.
Your ultimate home-buying strategy
Home-buying isn’t a simple and straightforward process. There’s a lot of money, emotions, and paperwork involved that must be taken care of promptly with the utmost care and precision.
Keep the above game plan in mind and ensure that you check all of these tips when you finally take the plunge and buy a new house for yourself.
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