Purchasing your very first home is a very exciting time in your life and marks a huge milestone. Unfortunately, there are so many different factors to consider first before you even start to look.
This article is going to help you identify what needs to be done before applying for your first mortgage and offer some tips to make the transition easier. Whether you are just moving out of your parents’ home or have been off on your own renting for years, there is still a lot to learn about truly being a homeowner.
What Can You Afford?
First and foremost, you need to determine what you can afford. It would be a shame to find a nice luxury pad in the perfect neighborhood just to learn that it is way too far out of reach financially.
Several different online mortgage calculators offer the free service of telling you what you can afford. You simply need to input such information as your annual household income, monthly expenses including any loans or lines of credit, the amount of your down payment, and the interest rate which will vary depending on the financial institution you are planning to apply through. This will then self-populate to let you know what you can afford and the approximate amount of your monthly payment.
Saving For a Down Payment and Hidden Fees
It can take years to save up enough to make that down payment but remember, the larger the down payment, the lower your monthly payment will be. This will pay off in the end.
It’s also a good idea to make sure you have some sort of cushion for those closing costs on your new home such as the lawyer fees. Be aware of anything that you will need to purchase for your new home. Are you hiring a moving company? Do you have all the furniture you need? What about a vacuum cleaner? These expenses can add up real fast.
A Financial Institution or Mortgage Broker
Next, you’ll want to investigate either a financial institution or mortgage broker. Have you checked out what rates the banks current rates are, or would you prefer to go to someone and have them do this for you? This will determine which of these routes you decide to go.
Once you have the lender picked out, you will need to get pre-approved for your loan. With any luck, the amount that you calculated online should be like what the loaner determines.
If you live in Melbourne and need a good Mortgage broker, check out Blutin Finance at: https://www.blutin.com.au/.
Picking That Perfect Home
You need to decide what “must-haves” there are for your new home. Are you concerned about the neighborhood? Is living close to parks or schools important to you? What about your commute to work? How many minimum bedrooms and bathrooms? These are all questions you need to address while keeping in mind that you may need to compromise in the end.
A real estate agent is highly recommended for this stage. Give your “must-have” list to this person and they will do all they can to find a home that checks off these boxes. Remember to look at as many houses as you want. This isn’t the time to rush!
When Making That Offer
You have found that home and are intent on purchasing it. Now the crucial negotiations begin.
Here you will utilize that realtor. All communications should go through this person. Never directly communicate with the sellers. Everything discussed will be put into a contract form so that there aren’t any issues later.
Don’t forget that you can negotiate more than just the house! See some bar stools that fit in perfectly at that kitchen island. Ask for them in the contract. While the sellers can turn you down, there is a chance that they won’t fit into their new home and will allow you to have them.
What About a Home Inspection?
Your offer has been accepted and conditions put in place. Now, for the home inspection. This is your new home and you want it to be just perfect. Make sure you walk through the house with this home inspector. Ask for close-ups. Ask to have the appliances turned on. Ask about anything that you aren’t sure of.
You never know what might show up. If there is something significantly wrong with the house and you want it fixed, don’t be afraid to request it of the sellers.
Enjoy Your New Home
Now the papers have all been signed and you have a scheduled move-in date! You will have one final walk-through with the realtor the day of the move where you will receive the keys and check to ensure there are no complications.
I hope this article helps you with your first home purchase! Enjoy your new home!
Interesting related article: “What is a Mortgage?“