Are you wondering what to consider when buying a house?
As the largest and most diverse demographic group today, millennials are reaching the life stages that usually motivate people to purchase homes – marriage and having children.
On the other hand, most have heard stories of the struggle and frustration in the real estate market as they were growing up, which turned them off the idea of homeownership and kept them renting.
However, if you are in your 20s or 30s and are considering buying a home, there is no reason to wait. These seven tips should show you the way and avoid your concern about what to consider when buying a house.
Things to look for when buying a house
1) What type of housing?
Among the first decisions, you need to make is what type of property best suits your needs. Will it be an apartment or a house with a garden or something in between? Your current life circumstances and lifestyle should be your guide.
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If you travel a lot and don’t have time for property maintenance, an apartment would be the better choice. On the other hand, if you have kids or plan for them to play in a yard, it’s a house you are looking for. Weigh all the pros and cons and give your decision careful consideration.
You should also be aware of the mortgage buying process and how long it actually takes to close on a house.
2) Know your credit score
Your credit score is one of the biggest factors in what your interest and loan products you will eligible for. Definitely, know your score before you ever try to get a mortgage. If your score is under 700 then you’ll need to spend some time repairing it. A score over 750 which leads to a lower interest rate will save you tens of thousands of dollars over the life of your mortgage. See how to raise your credit score to get better loan terms.
3) Consult your network
Don’t hesitate to ask your network, more importantly, your elders – the people who care about you or even your older colleagues and mentors from work and college. They have probably gone through the same situation and their experience can be a great resource for you.
Buying your first house makes for a steep learning curve, which means that you’ll need all the help you can get.
In addition, some of these people may even be able to help you with your down payment, which in turn can get you more favorable loan terms.
4) Boost your down payment
Financial experts agree that young people need to look at the bigger picture if they want to see their savings accumulate. Rather than giving up their ‘avocado sandwich and latte’ as Australian millionaire Tom Gurner suggested, they need to consider more effective steps, like lowering the rent they are paying, or even moving back with their parents for a couple of years. Selling your car in favor of public transportation, or at least downsizing to one car for couples is another consideration to save for the home down payment.
5) Work with a trusted professional
Although tips from more experienced friends and family members are helpful, they are nothing compared to what realtors can tell you. Some of them have decades of experience in the industry, meaning that they know what to do and what not to do when buying a house. Aside from guiding you through the entire purchasing process, a reliable buyer’s agent in Canberra can save you a lot of money and time.
6) Long-term vs. immediate costs
From applying for a mortgage, getting mortgage insurance and home inspections, to hiring an attorney, there are many fees that can add up quickly. Keep in mind that these are the costs before you even become a homeowner. Many inexperienced buyers fail to budget all the long-term expenditures properly and end up struggling to pay their bills. You should know each of these costs and factor them into your home buying calculation.
Real estate is a long-term investment. The market will have its ups and downs, but if your financial situation is solid and your plans realistic, buying will eventually show to be more rewarding than renting.
7) Scout great locations and neighborhoods
The location and neighborhood not only affect the value but also the convenience of reselling your property when the time comes.
You may fall in love with a specific home because of a lovely garden or the arrangement of the rooms, but if it’s located on a busy transit route, the next buyer may not see the perks that made you buy it in the first place. You can find many professional tips on how to choose a neighborhood online.
8) Shop around
Want to see what rates are available to you in a matter of 2 minutes? You can easily compare offers from up to 5 mortgage lenders at LendingTree in less than 3 minutes – for free! Or simply view the table below for reviews and comparisons of the best lenders for yourself.
As you can attest, knowing what to do before buying a home is critical.
Hopefully, you enjoyed this new house checklist of what to consider when buying a house. Leave a comment if you have any questions!
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