Buying and moving into a new a house is a decision that affects every aspect of one’s life: it affects your finances, your lifestyle, your work life and your relationships. Therefore, this important decision should be made only after you’re confident that you are well informed to make the right choice.
Here are four key considerations first-time homebuyers must bear in mind when buying the house of their dreams.
Avoid large purchases while hunting for a new home
Whenever you plan to buy a new residential property, you should stop any large expenditure that will eat away at your savings or affect your credit score. For instance, if you’re scouring for homes already, you need to temporarily shelve the plan to buy that car you’ve been eying all this while.
Many homebuyers commit themselves to all sorts of big expenses in an effort to bring a sweeping change to their lifestyle with moving into a new house. Financial experts say this should be avoided as lenders will dig deep into your current debt before offering you a home loan. Also avoid getting a new credit card or using your current ones to make big purchases when you’re in the process of taking out a home loan.
Get your home loan approved before you look for a house
Real estate advisers vouch for the fact that homebuyers who come to them with a pre-approved home loan stand a better chance of buying a property of their choice versus those who are only pre-qualified for mortgage. This is because getting prequalification for a home loan is quite easy—you have a good credit score, you share your financial information with a lender, and they approve a tentative loan figure that you can expect to get at the next step of the lending process.
However, when a lender pre-approves you for a home loan, they will verify your financial and employment details (your assets, present income and any liabilities) and commit a certain amount that they will lend you. Pre-approval arms potential homebuyers with pertinent information so that they can shortlist homes they can afford to buy within a budget.
Moreover, pre approval allows you to get the best mortgage deal and competitive interest rates. Therefore, get a pre-approved mortgage before you start looking for a home.
Get a feel of the area before you decide to make it your home
Buying a house is such a big decision that you cannot be lax about any aspect of the purchase. Unfortunately, many homebuyers tend to focus only on finding the best home—often nudged by real estate agents towards certain properties—that they forget to check the livability of a place and its suitability to their lifestyle.
Experts at Stewart Realty, which specializes in Homes In Meridian, Idaho, say that homebuyers should always do thorough research of the neighborhood and should get in touch with a local real estate agency that has the knowhow and expertise on real estate trends and livability of a particular area.
Whenever you shortlist a neighborhood, visit the area not once but multiple times on different days of the week and at different times of day to get the real feel of the place. Is the neighborhood well equipped to fulfill your family’s needs? Do the people seem friendly and welcoming? Are there schools and health centers in the vicinity? How far is your workplace from the area? Will moving here improve your lifestyle in any way? Ask yourself these and more questions before you invest in a property where you’ll live for years to come.
Don’t get carried away into buying the biggest house on the street
Yes, you want a big house and rightly so—buying a home is a one-time expense and you’d rather invest in the biggest and the best house you can afford. Real estate experts, however, have a different viewpoint. They advise homebuyers against going for the largest house on the street simply because it has a limited potential customer base, which means it would be hard to sell once you want to move out.
You must also consider the value appreciation the house will experience in, say, the next 10 years. Homes on the same street that sell for a lower price now will see greater appreciation in the future as real estate prices of an area tend to be in the same bracket. So give some thought to your decision of investing in the biggest house on the block and don’t ignore the return on investment.