December 21, 2020

Things to Consider When Buying Your First Home

In this article, you can read about some things you need to know before you buy your first home. Here is a list of tips and thoughts for those people considering their first home purchase. These may help you get through the process, save money, and complete the deal as quickly as possible.


Borrowing money responsibly

Most homebuyers need some financial help, whether they are buying a home for the first time or the third time. You want to borrow the right amount and that means borrowing what you can afford. Speaking to a home loan advisor can help you here to stay on the right track. Speaking to real estate agents is essential for getting the right information, Richard Morrison Vancouver Homes can help you decide if you can afford to buy a house in their region. You can check online with mortgage websites that often have calculators for you to see instantly the kind of amount you may be able to borrow.

Allow for changes in finances

When borrowing the home loan also consider whether the payments will go up and by how much. In the past, there have been incredible rises and many people became homeless. You would normally be made to take out insurance as part of your loan and it makes sense to check what cover this has. Is it interest only or does it cover the full monthly repayments if you are made unemployed?

Credit ratings

To get the best mortgage at a low-interest rate you need to have good credit. Make sure you are paying your credit cards and other bills on time. Get your free credit reports from Experian, Equifax and TransUnion. Go through these and look for any problems. If there is anything serious like County Court Judgments then you will need to fix these before going ahead. 

Keep your credit cards 

Many people think that paying off their credit card and ditching it will help their rating but it won’t necessarily work out that way. To explain why you need to look at your overall available credit. 

To work this out with simple maths this example will assume you have 4 credit cards with a $2500 limit on each. 1 of your cards is at $1500 and another is at $1000. The others are basically at zero. So at the moment, you are using 25% of your available credit. You then decide to cancel the two cards that you don’t use and that leaves you with a $5000 credit limit spread between 2 cards. The problem is you are now using 50% of your credit line.

This is not an encouragement to spend money on them only to keep the lines of credit open. Your adviser will let you know if you should make any other changes.

Checking out the neighborhoods

As real estate experts always say the 3 most important things are location and......you can repeat that 3 times if you like.

It may be a bit of a cliche but it still stands true. You might find a large wonderful looking house and put your money into buying it only to find out the crime rate is sky high, you have terrible neighbors and the local government is about to build a waste incinerator nearby.

Look at public records for planning applications. Check crime rates online. Read the local news. Ask the seller about the immediate neighbors and other people in close vicinity. He or she may be getting out for other reasons that they are saying. You can visit the area at different times of the day and at the weekends to get an idea of what it is like to live there.

Local amenities

How the area is and what is planned for the future will affect how much your home is worth. You need to look at public transport and the schools to start with. Is the area due for gentrification? If so this makes the area promising for the future. Is there a good employer in the area or is it easy to get to the city for commuters?

When you buy a property you have to think about who you might sell it to in the future too. A cool bachelor pad might be really appealing to you but when you try to sell it you will find that something more practical would have had a broader appeal to buyers.

Home inspection

Once you have found the place you want, get a home inspection to check for mold, pests, and structural problems. This is an absolute must to make sure there are no hidden costs about to spring up at you. What problems are found will depend on the type of house you are buying. Are you looking for something you can move straight into or somewhere that needs fixing up and some DIY to get a lower price?

Negotiate

So you are happy with the area, the home, and the report. Now it is time to make an offer. Obviously don’t try to steal the house (unless you can) but ask your estate agent what they think you can offer sensibly and get it as cheap as possible and then you may get your first step on the property ladder.

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