First time home buyer? – Checklist to keep in mind before your Purchase!
Few things to keep in mind before purchasing your dream home.
Location vs Space:
There is usually confusion in deciding between location and space for first time home buyers, You may like to buy a home in a particular location where the space of the house is very small. There can be some locations where you can get a bigger house at the same price. So, it is always important to settle in advance on space or location to avoid dissatisfaction later. Before shopping it’s important to set your priorities and decide which is more important to you, space or location.
Do Not commit before you’re ready:
Owning a home is a huge commitment and sometimes more expensive than we realize. For instance, your monthly expenditure on EMI for housing loans can be much higher than the rental amount you currently pay. In addition to your housing loan EMI, figure out how much you are paying for property taxes, homeowners insurance, and other monthly costs of owning a home. So, before buying a home make sure you know exactly what you are getting into so you can decide if you are financially and personally ready for such a large commitment.
As a first time home buyer down payment is never a bad investment:
If you have some savings or extra cash, it is a good idea to add that amount to your down payment. This will help you save a lot in interest that you pay on the housing loan. Even if you qualify for a good percentage of the loan amount, it’s always better to add an additional downpayment and reduce the actual loan amount.
When you are buying a plot, it’s a good idea to find out the boundaries of the plot. Nowadays you can’t always rely on the seller’s knowledge of the property, so getting the land surveyed before purchasing might clear the uncertainties you have.
Not all the properties come fully furnished. A new property always needs a lot to be done interior to suit your needs. A used property might need a lot of maintenance and repairs to be done. So, it’s better to reserve some cash for the home improvements.
A pre-owned property has to be inspected thoroughly to know the exact condition of the property. Depending on the age and upkeep status of the property there can be a lot of maintenance required. Digging deeper during the inspection will save you a lot of money and mental stress.
Negotiating after Inspection:
If you discover a flaw during the home inspection, use it as an advantage in negotiating the price. You might save some money in negotiating which you can later use for home improvement.
Analyze personal and financial costs:
After adding up the EMI to your monthly expenditure you may have to make some tough personal sacrifices. Before buying a home, think about what kind of personal and financial sacrifices you’ll have to make. If affording a home seems a stretch right now, it’s better to wait a while and save up more money.
Don’t overlook the landscaping:
The exterior works of a home can add up as quickly as the interior. If you don’t want to spend more on the exterior after you buy a home then it’s better to look for a home that already has the amenities required.
Know your loan:
A loan rate in an advertisement or a pre-approved offer can be attractive and make you think of going for it. But what you really end up paying might shock you. The closing charges, documentation charges, taxes, and various other factors might increase your loan repayment.
The longer tenure you choose the more money you pay in closing the loan. Pre-closing charges can be higher than usual when offered a low-interest rate plan. Don’t be afraid to shop around for the best rate. Spend some time researching the market conditions. Be sure to read all the clauses carefully and understand them before finalizing the housing loan.
As a first time home buyer, purchasing a home is a huge commitment and a one-time investment. The above tips help you in understanding the factors to keep in mind before purchasing a house.
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