HOW TO BUY MY FIRST HOME?

Getting ready to buy your first house can be challenging. Credit scores, down payments, and home loan are all on your mind. Here’s a guide to help you get ready to make one of the most important and life-changing events of your life.

Buying your first home can be one of the most exhilarating and stressful moments of your life. But armed with the right information, you can look for a house, apply for a home loan, and close the deal with confidence.

 

Step 1: Start with your Dreams

Before you jump into home buying process, you need to evaluate all aspects. Get realistic and think about the life you want to live. Then take a close look at your situation and decide if owning a house is going to get you closer to that life or not. For most people, the biggest financial decisions are also life decisions, so ask yourself few questions and be honest while answering it!

 

Does this city feel like home?

Do I want to travel and move around, or do I need stability?

What are my other financial goals, and how does owning a home impact them?

Am I financially stable to service the monthly Home Loan EMIs?

 

Step 2: Figure out how much you can afford

The first thing to do before buying a home is to make sure it’s the right time to do so. Generally speaking, owning a home pays off financially if you will live in it for at least five years other than creating a long term asset.

However, if you’re not sure about the property occupancy, there’s nothing wrong with renting. Only buy a house that you can afford today!

Don’t buy a house which exceeds your budget else you might live in a beautiful home but may find it difficult to save or even cover other monthly expenses.

 

Step 3: The Saving Process

Your cash expenses when buying a home amount to more than just the down payment. There are also closing costs, appraisal fees, stamp-duty, registration charges, property agent’s fees, loan application fees, and other costs to factor.

The down payment and closing costs are your upfront costs. After that, the ongoing costs include property taxes, homeowners insurance, deposits (Utilities, Gas connections etc), monthly society charges and moving expenses.

Don't be left with a zero balance in your bank account by the time you get the keys; prepare for these additional costs ahead of time.

 

Step 4: Budget with your goals in mind

Once you decide that owning a house is right for you, start working around a plan to have at least 30% margin money of the total property cost .

To accomplish this, you may have to forgo a larger rental apartment or plans to buy a new car or part ways eyeing on that new smart phone.

Set up a basic budget for living expenses, and see where your money is going and where you can save. For example, after looking at all necessary fixed expenses, you may cut down on the expenses towards entertainment, frequent restaurant visits and those little luxuries.

Reach out to your family and friends, too. One of the hardest parts of buying a house as a single person is arranging the funds all by yourself. Although the choice is yours, you don’t have to do it alone. It’s really important to have someone you love and trust to brainstorm with, talk to as well as get a helping hand!

 

Step 5: Find the right Home Loan

Once you’re confident you have enough cash saved to pay for closing costs and 20% of your home as down-payment, you’re ready to handle the other 80% by taking a Home Loan that’s right for you.

Get prequalified for a loan and take the extra time to get a preapproval letter before you start your home search. Preapproval shows sellers that you’re a serious buyer, which is a great way for first-time home buyers to get ahead in a competitive market as well as puts you in a stronger position to negotiate on property pricing.

To get preapproved, your bank will need to verify your financial information (proof of income, taxes, etc.) and you’re required to submit your loan application further process.

 

Start with a stress-free home loan pre-approval with Homely Yours. Check out the latest home loan interest rates for all major lenders on our Compare Home Loan Section. [updated in real-time]