3 Basic Preparation Tips for First-Time Home Buyers
Category Buying
Buying a home for the first time is incredibly exciting!
However, if you aren't fully prepared, it can soon become a daunting process!
Take a look at these three tips to ensure that your first home buying experience actually goes smoothly and without (too much) stress:
#1 - Assess your affordability and credit history
Before even delving into the house-hunting process, it is vital to determine your price bracket and figure out exactly what you can afford. Your affordability is dependent on your disposable income following expenses and deductions.
In order for the bank to give you a home loan, your bond repayment amount cannot exceed 30% of your gross monthly income!
The bank will also look into your credit history to make sure that you have a clean credit history, which is based on whether you have consistently paid back previous loans.
Tip 1: If you're worried about getting a home loan approved, you should get prequalified. Not only does this give you security, but it allows you to negotiate with more power!
Getting prequalified requires filling out a simple application and gives you access to exactly what to expect in terms of the deal, bond cost and interest rate.
#2 - Use your home loan wisely
It may be tempting to take the full amount approved by the bank, but remember that this would mean that your bond repayments will be reaching the limit of your financial borrowing capacity.
Choosing a smaller amount means that it will take longer to repay the bond, but at least it makes the monthly instalments far more affordable!
It is advisable to go for the lowest loan amount you can afford, as it will leave space for unpredictable interest rates increases and ensure that you always have enough money for your monthly payment.
Tip 2: Whatever decision you end up making depends entirely on your personal situation and should be based on the following:
- Would you rather be cautious and sure that you are able to pay your bond without being put under financial pressure?
- Is this the best time for you to be buying a home?
- Are you financially stable?
- What is your credit history like?
#3 - Maintaining a clean credit record
After moving into your new house, ensure that you make your payments timeously, as this will ensure you remain on good terms with your bank and help you to maintain a healthy credit record.
After all, the bank will hold you solely responsible for paying the home loan until it is fully repaid.
Tip 3: Make sure that your finances always account for unexpected emergencies or expenses.
For instance, you never know when random plumbing issues could occur and it is best to have some money put aside for this type of emergencies.
Plus, it'll ensure that you don't have to dip into your home loan in order to pay for these unpredictable events.
Bonus Tip: Maintain your property as often as possible and tend to maintenance issues as soon as they arise so as not to spend unnecessary money on this down the line.
Author: ImmoAfrica.net
