The reason you’ve clicked on this article is because you’re looking for house buying advice. Purchasing a home is probably going to be the largest financial transaction of your life. A lot of people go into it thinking they’ll know what to do. It will be a breeze; there’s nothing to worry about, right?
Unfortunately, this line of thinking is incorrect. Buying your first house can be a very difficult and tricky process. There’s a lot more to it than you think. And, this is why I’ve decided to put this guide together. I aim to help everyone understand the process of buying their first property. We’ll go through some of the important decisions you have to make, and I’ll include tips along the way.
To set things in motion, I’ll start with the main thing on everyone’s mind; money.
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Financing Your House
It’s no secret that you’ll have to spend a lot of money on a house. They can cost hundreds of thousands of dollars, with some creeping into the millions. Naturally, this presents you with an immediate conundrum; how will you finance your house?
There are two main answers to this question. Firstly, you could pay for it using your savings and money that you’ve earned. If you’ve saved up all your life or are in a well-paid line of work, then you might be able to afford it. The benefit of doing this is that you are the full owner of your home from the get go. However, it’s something I recommend for people that are capable of surviving after they’ve paid for their house. You’ll find that this isn’t the case for most first-time buyers.
So, instead of using your own money, you can opt for a different route. The majority of people will apply for a home loan, aka a mortgage when buying their first property. This is a large loan, approved by a bank, and secured with your property. What does this mean? It means that your new house is used as collateral to ensure you pay the loan back. Failure to make repayments will result in the bank seizing your home, and you being kicked out. The obvious benefit of a loan is that it enables people to afford their first house. All you need to do is put down a deposit, which is a small fraction of the total house price. Financially, you won’t suffer, and mortgage repayments tend to be manageable. Of course, not everyone gets approved for a home loan. Sometimes, banks might reject your application. As seen here https://smbia.com.au you can find mortgage brokers to give you advice with your application. This makes sense if you’ve never applied for a mortgage before, and want to get approved. Once approved, you can buy your home and start thinking about your future
At this point, a lot of people might wonder whether buying a house is the right idea. Some people might be tempted to rent a home instead. However, I think it’s a better financial decision to buy a home because you’re paying for something you’ll own. Even if you get a mortgage, eventually you’ll own the house when you’ve paid it back. With renting, you’re essentially spending money on something that will never be yours. At least when you buy a house, you can sell it as well. There are sites like http://www.totallymoney.com/ that go through buying vs. renting in full detail.
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Planning Your Move
The financial aspect of buying a house is going to be the biggest decision and require the most thought. But, planning your move will be the second thing on your mind. It’s crucial that you’ve thought everything through and got a complete plan of how things will go down. Otherwise, you’ll find it very difficult to buy a house.
For starters, you need to plan where you want to move. Are you staying in the same area, or do you want a complete change of location? Obviously, this is going to have an impact on what houses you’ll be buying. If you’re moving locations, then you can ignore any houses in your surrounding area. Another thing you need to plan is when you intend on moving house. That’s right; you can’t decide to move randomly. It has to be thought out well in advance. Why? Because this gives you the time to find a house and perhaps save some extra cash too. If you woke up one day and decided to buy a house, then you’re going to run into all sorts of problems.
Rushing the house buying process will result in you making a terrible financial decision. You could end up buying a house for too much because you’re rushing and not thinking things through. Or, you might end up paying for a house, without doing any additional checks. As a consequence, you could buy a pile of junk and need to spend loads to fix it up. To make the best financial decision possible, give yourself a lot of time to plan everything and think things through.
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Buy Less Than You Can Afford
My final piece of advice revolves around how much you should pay for a house. Naturally, people are going to be different here. It all depends on your monthly income, savings, etc. Typically, when applying for a mortgage, you’ll be given a figure deemed enough for you. The lender is basically saying that’s as much as they believe you can afford to spend on a house. There are even sites like http://www.bankrate.com/ with tools to help you work this out. The idea is that you’re given a figure, and that’s the maximum you can afford to pay.
After learning this, many people look for houses that are priced at that figure. However, this is not the way for you to do things. You should take the amount you can afford to pay, and look for cheaper homes. But less than you can afford, and it should help you stay in a good financial place. Too many people spend loads on a house and live poorly because of mortgage repayments and everything else.
And there you have it; this is all you need to know about buying your first house. Hopefully, this has been useful and you’re now ready to begin looking for homes.
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