Interesting! You’re about to get into so much debt that it could take you 30 years to get out of it, kidding (more or less). You’ve probably heard that real estate is a great investment. And it totally is! But, in some cases, buying a home can be a nightmare in disguise. You never really feel ready to buy your first home, or you may not even know what buying a home really entails.
Whatever the case, we are here to provide you with detailed information on what to know before purchasing your first home. If you check all of these boxes, your first home purchase will be easy!
GETTING APPROVED IS MORE THAN JUST YOUR INCOME
Before you even start thinking about buying a home, you need to make sure it is approved. A family “he knew“How much they wanted to spend on a house and what they could afford. But they didn’t realize that the approval process was more than what they wanted to spend!
There are several different factors that go into a pre-approval process. The main ones are:
Entry:
Based on your income, they will calculate how much you can afford. The higher the income, the bigger the loan. That does not mean that if you have a low income, you will not be approved for a loan.
Time of the work:
Generally, you must currently be in the same job for 2 years or more. This is not the time to change jobs or try to figure out your career path. They want to see consistency. We are not saying that you cannot get a loan, because it can be done. You will have to go through many more hurdles if you have recently changed jobs in the last 2 years.
Credit score:
Using your credit score, they can find out how “loan worthy“It is. Just make your payments, people. If you don’t make your payments, they won’t lend you the money.”
THERE ARE MORE EXPENSES THAN JUST A MORTGAGE PAYMENT
You have regained your prior approval and are pleasantly surprised that you were approved for more than you thought. This is where homebuyers make the single biggest mistake. Buy a house to the maximum for what they were approved for.
If you can remove something from this post, we want it to be like this: DO NOT buy a home for the maximum amount it is approved for. There is a reason why it is your maximum amount.
If you’re just making ends meet just making your mortgage payment, what happens when unexpected expenses come up, like job loss or medical bills (and yes, it CAN happen to you)? There is always something that comes up and you definitely don’t want to have trouble paying your mortgage.
EXTRA COSTS
You should not only consider the PMI, but also the closing costs. You will spend between 2% and 5% of the house price on closing costs. If you feel completely comfortable and confident that you can afford the closing costs and put in a decent amount (preferably 20%), then you are pretty sure. There’s no use paying more than you should just because you didn’t want to take an extra year or two to save.
HAVING AN EMERGENCY FUND WILL MAKE OR BREAK YOU
We know that you think that nothing is going to happen to you and that life will always be good and elegant. But we hate to tell you that you are wrong. We just want you to be prepared and be smart. Generally, you should save 1% of your home costs for ongoing maintenance each year.
NOT WORTH IT IF YOU ARE THERE FOR LESS THAN 5 YEARS
It has been shown that you need to be in a HorI for 5 years to start covering expenses.
Basically those first 5 years only pay the interest. At that time it has not even made a dent in its capital. Now you would have to try to resell at the purchase price you bought for or get the money back, try to sell at a higher price. Doesn’t that sound like a hassle?
There’s so much upfront cost that it’s not even worth it if you don’t plan on staying that long. In this case, renting may be a better option.
YES, THERE IS SUCH A THING AS A SELLER AND BUYER MARKET
The market you are in can greatly affect your purchasing power. Builders can sell their homes at a ridiculously high price and take them away in days.
In a buyer’s market, you have a lot more leeway. You have the decisive power to find a home that you really like (and not just pick one because you can’t find anything else). You also have the opportunity to come even below the asking price. If you know you’re in a seller’s market and you’re afraid of paying too much for a home, it’s okay to wait.
YOUR INTRODUCTION KNOWS MORE THAN YOU
Gut feelings go a long way. Your instinct is much smarter than you think, and you must listen to it. Do you feel ready to buy your first home? Is it something that really is the best for your family or do you just want a home because everyone else is doing it?
You may never feel totally confident about buying a home (and that’s completely normal), but make sure you are prepared. Buying your first home can really be a great experience and a better investment in the long run.
Regardless of what you choose, we hope these tips help you make your decision and be a little more informed about what buying your first home really entails.
For more information visit – Mantri Developer Website