Planning to buy your dream house can be exciting yet pretty overwhelming as it brings along a lot of responsibilities. Since investing in residential real estate requires a lot of money, people usually opt to apply for a loan. There are numerous processes, including documentation and paperwork, involved with the loan process. Considering this, individuals sometimes also prefer to get help from financial advisors who can guide them through the complete home buying process. Let us dive deeper and look at the tips for first time home buyers:
1. Recognize Your Needs
You must have dreamed of your nice and lavish multi-story house for quite some time. However, as you grow up and your financial needs and dependencies change, there is a need to rethink how big an investment you can make. For example, if you are raising your kid and paying their tuition fees, it may not be possible to invest in multi-story residential property as you will find it challenging to pay the EMIs.
Furthermore, if your job involves a lot of traveling, you stay at home once in a week or so, it is your responsibility to choose a safe neighborhood before buying a house. This will ensure the safety of your kids and spouse back at home when you are away. Therefore, a townhouse or a condo in a safe surroundings will make more sense considering your financial needs and other requirements.
2. Get Habitual To Save Money
It is an excellent habit to start saving when you plan to buy an asset like a car or even a residential property. Waiting to start investing after you finally find your dream house can be a foolish idea. Get hold of your expenses and manage them well to save an adequate amount which can be used as a down payment. You can also keep the bonuses or rewards earned at the workplace or elsewhere in your savings account. Furthermore, you should also monitor your expenses and cut down on unnecessary spending to save more.
Building your savings account early comes in handy in the long term to pay off the expenses throughout the homebuying process. These expenses primarily include home appraisals, down payment, home inspections, closing costs, and much more. Unplanned expenses like repair and maintenance can also occur, which shall be addressed if needed.
3. Look For Multiple Loan Options
Individuals who are unaware of the various loan options available in the market think that the conventional loan is the only home buying option. However, you must be assured that there are different mortgage loan options available to choose from. Furthermore, you also get the chance to select from a Fixed Rate or an Adjustable Rate (ARM) Loan offered by various lenders. To know the in-depth market analysis, it is advisable to contact a financial advisor who can connect you with the most trustable lender. The financial advisor can also help you to understand different home lending options and choose the one that fits your needs and desires.
If you are still confused about how much loan you can afford, use a mortgage calculator with down payment to calculate your EMIs before applying for the loan!