Big decisions such as a first-time home purchase can often be very stressful and daunting. Not only do you need to carefully consider the financial side of things which includes home loans, you will also need to think about the other decision-making factors such as location and environment. Many new home owners often forget to consider all their options before putting their downpayment so, we are here to help you avoid making these six mistakes when getting the property of your dreams.
- Look At Your Score BoardCheck your credit score before you submit your application – this should be your first step when you apply for a Home Loan. A good credit score usually green lights your entire application process. More often than not, Home Loans are rejected due to a poor credit score but this can be easily avoided. As applying with a poor credit score only reduces your chances of getting a Home Loan, you must remember to always check your score before working on your loan application. In this way, should the credit score be unsatisfactory, you’ll still have a chance to get your score up before officially applying for a Home Loan.
- Add Up The NumbersAfter checking your credit score, take a look at your finances to see if there is a portion you can spare for the downpayment. Do keep in mind that the amount you set aside should not eat into your monthly budget or touch on your emergency fund. This is because once the loan EMIs start, you might be strapped for cash. Banks generally fund up to 90% of your property value but if we assume that banks will only fund 80% of your home value, you will need to make arrangements for the downpayment accordingly. If you don’t have enough, you might want to shelf the idea of purchasing a home until you’ve saved enough.
- Do You Have an Emergency Fund?In your excitement to purchase a new home, you must remember not to upset your overall budget. Once you’ve gotten your house, you will find that there are many other expenses you will have to attend to. That’s why it is important to keep your emergency fund untouched for situations like this. If you’re worried about possibly draining your emergency fund during your property purchase, then aim for a smaller property that’s within your budget. You can always move to a bigger property when your finances improve.
- Think Like Sherlock HolmesA good rule to follow is not to fall in love with every house that you see. All that giddiness will cloud your judgement and ability to choose a property that’s right for you. Take a look at as many houses as you can before you say yes. If something seems too good to be true, do a thorough background check on the property. Do not let aesthetics be the only reason you commit to the property. Conduct a bit of research into the market credibility of the builder and the material used in building the house as well as the maintenance costs and amenities available in the area. Remember to be practical because you will be spending your foreseeable future in this home you choose.
- Get Your Home InspectedThis is probably a no-brainer. After you’ve selected the home of your dreams, ask for the papers and have them thoroughly reviewed by a real estate lawyer. It would be good for you to give them a read as well, even if you may not understand the documents. When you’re with your lawyer, make it a point to ask as many questions as you like since you need to be 100% assured before you make your purchase. You wouldn’t want to risk getting into any unsettled legal matters from the previous owner. If you’ve got any real estate savvy friends, take the chance to ask them what they think of the prospective property. Expert advice is always beneficial in such a situation.
- Constantly Touch Base with Your Property AgentKeep in touch with your property agent after making the downpayment because they can still falter on handovers. When you make timely calls to your agent, you ensure that you are updated on the progress of the paperwork and the eventual handover.