Being a first home buyer, there are certain things you should be aware of before buying a house, including the eligibility criteria, financial requirements, market trends, the sale process, when to buy, and more. Here are six essential things that all first home buyers should know if they want to make a well-informed decision before buying.
The first thing to know is whether you fulfil the eligibility criteria of a lender or not. Being a first home buyer, the only thing that matters is the loan value you can apply for because really, you can only buy a house if you have money to finance it.
To assess whether you fulfil this criteria, the lender needs to know about your existing debts, income, and assets. In other words, they need a complete picture of your financial position to evaluate whether you are eligible for a loan or not.
Understanding the Financial Responsibility
When you apply for a home loan, it is important to understand the financial responsibility of making repayments on time and meeting other obligations. Lenders will assess your application to figure out whether you can make timely repayments or not.
A lot of first home buyer may not have a clear understanding of how the real estate market works.
It’s important to pay back any previous debts in full before applying for a home loan as this will enable you to start fresh and also improve your credit rating while increasing the chance to secure a home loan on good terms.
If you are applying for a home loan for the first time, consolidate your debt into one or pay back your obligations before getting a mortgage. Having a stable income also improve your chances of getting a home loan. Lenders will ask for a pay slip or any other proof of income to assess your employment security. If you are a self-employed individual, provide a balance sheet, profit and loss statement, or tax return to show that you are financially stable.
The sooner you enter the market, the better it is. Most first home buyers wait to get basic knowledge before they jump into the market. But in order to succeed, just aim to take the first step and the rest will follow. There are different aspects of the real estate market that can only be understood if you enter the market. For example, once you start visiting different locations, you will learn what you want versus what you can afford. This will put things into perspective. Therefore, make an early entrance and learn to compromise on the property condition; its type, and the place where it is located.
Sometimes you cannot afford to buy a house that you want, but it doesn’t mean you can never get it. Take one step at a time. Buy a house that you can afford to pay for today with the purpose to resell it in the future.
Upgrade your lifestyle when you can afford to. Learning to compromise early on helps you reach further opportunities later in life.
It’s important to seek legal advice as well as expert advice before signing the agreement. Contract of sale includes complete detail about the property. All you need is a conveyancer or a lawyer who can go through the document and explain the terms to you so that you know what you are signing up for.
Moreover, being a first home buyer, you should be familiar with the sale process. Try to figure out how it works in your state and make sure you are aware of your obligations and rights when it comes to buying a house. You can also attend different auctions to understand the process.
That’s right! Don’t rush when it comes to buying a house. Carry out thorough research and weigh in your options before making any decisions. Get building inspections completed to find out if there is any damage or structural faults. Beware that plumbing and cracking faults can easily be covered with a little makeover, so it is important to get a formal inspection as it will put you in a better position to bargain the right price instead of overpaying.
As a first home buyer, keep these factors in mind as they will help you find the right property at the right time.