Buying a house is a significant decision and requires heavy investment, both emotional and financial. Hence, you will find yourself at crossroads several times in the process of buying a house. Here, you can find the details about want to buy your own home.
To get the confidence that you are making the right decision, it is advisable to get an understanding of a few crucial factors.
In this article, we highlight some factors that will make house-buying an easier process for you. It is especially essential for first-time homebuyers who are inexperienced in this area and want to get loan for moving house.
1. Assess If You Want To Buy A House
Although most UK citizens want to buy a house, the decision is not always correct for everyone.
Since it involves a substantial investment, there is little room for mistakes or impulsive decisions. It is advisable to weigh the pros and cons with your family to decide if you should continue renting out or take the plunge.
Firstly, it is a big commitment. You won’t be able to pack up and move anytime you wish to. If you are still uncertain about your job, it is best to wait for some time.
A lot of people feel that buying a house is an investment. However, if you want to stay on the property, it is generally not considered so unless you get an extremely lucrative price point or low-interest rates.
Lastly, once you buy a house, you become responsible for the repairs and maintenance. It requires time, effort and, sometimes, can burn a hole in your pocket.
Rather than giving in to peer pressure, analyse all these details to determine if purchasing a home is the right move for your family.
2. Decide Your Budget
When you start house hunting, you may get swayed with a pool or a location that is a stone’s throw away from work. In such situations, you may get tempted to spend more than you can afford. However, such a step could land you in a soup later.
The first step when you choose to buy a house should be to decide your budget. Factor in your family responsibilities, upcoming life events like a wedding or a baby, and your job security to estimate your budget.
Scan your bank accounts to understand the downpayment that you can afford. A home buyer will typically have to manage 20-25% of the property value as a deposit. Besides, there will be hidden charges and bank fees that you will have to pay for.
After evaluating all these factors, you can work out a budget that won’t burn your fingers. Convey the number to your broker and stick to it.
3. Consider Other Expenses
There is a catch that you may not be aware of – especially if you are a first-time homebuyer. Buying a house entails a lot of other expenses other than the price of the property. For instance, you will have to pay processing fees if you are planning to take a mortgage.
Besides, the house may require some repair work, or you would want to make some changes to make it more comfortable or suitable for your family. If you have a baby, you will have to spend on baby-proofing the house.
You will also have to account for the broker’s commission if you are working with one. Your budget should cover all these expenses. With a view of these other costs, you won’t make a decision that you will regret later.
4. Get Your Finances In Order
Here is something that many people think of postponing to a later time while buying a property. However, doing it before you begin your house search will save you time and tonnes of effort.
For instance, if you have a house that you want to sell, it is time to evaluate if you should sell it before or after buying the new property. Similarly, if you are still repaying your student loan, you may want to clear it off before taking a mortgage.
5. Evaluate Your Family’s Needs
For most people, buying a house is once in a lifetime activity. In all probability, it will wipe off a significant chunk of your savings. Ensure that it is the right decision by considering the needs of all the family members.
If your children are still young, explore kid-friendly neighbourhoods. Scan the area for good schools, parks and entertainment centres. If your children are in the teen years, they may not want to leave your existing location because of their friends.
Similarly, the house should be at a reasonable distance from your office and that of your spouse. The best solution is to sit with your family and find agreeable locations.
6. Evaluate The Mortgage Rates
Whether you like it or not, the mortgage rates will play a crucial role in your home purchase. Several homebuyers get tempted to spend more than they can afford when the interest rates are low.
However, the rates are not fixed in most cases. Even if you choose a mortgage that allows you a low rate benefit for a few years, the lender will later shift you to their standard variable rate. It will help to use a loan calculator to understand your long term liability.
7. Shop Around For A Better Deal
It is advisable to not settle for the first mortgage deal that a lender offers. You have every right to take that offer and approach other banks in search of a better arrangement. Your consistent efforts may get you a much sweeter deal than you had imagined.
Similarly, do not settle at the first house you see. Look out for more to see what the market has to offer. Buying a property could be a long-haul process, but your efforts will definitely pay off in the long term.
Buying a house can be a daunting process, and you will ask yourself several times if you are doing the right thing. But if you’re smart with your wealth and planning, you can’t go wrong.
Consider your family’s needs, evaluate your finances like christmas expenses and major life events, and understand the mortgage rates. With these home-buying tips, you can take the leap of faith without any worries.