6 Helpful Hints To Keep In Mind When Buying A Home
At some point in our lives, each of us will consider whether or
not this is the best time for us to purchase a home. However,
rarely is buying a home as easy as simply finding a vendor willing
to sell their home and then purchasing it. In today’s world, a
number of significant factors will need to be taken into account -
after all, buying a home is likely going to be the most expensive
decision you’ve made in your life!
In order to help you out, here are 6 helpful hints to keep in mind
when buying a home:
1. Am I Ready To Buy A Home?
When considering whether or not you are ready to buy a home,
consider the following:
• do you have a steady source of income? – although buying
a home maybe top of your current wish list, if you do not have a
ready means of paying for it, it’s very likely you’ll be putting
unnecessary financial pressure on yourself, which could affect
other aspects in your life. Remember, there are few things worse
in life than having your home repossessed;
• do I have experience of caring for a home? –potential
home buyers should always have experience of caring for a home,
including how to pay those important utility bills!
• do I have money saved? – buying a home is going to be the
most expensive decision of your life, so don’t make this decision
if you have no money saved. Also keep in mind that you’ll likely
need to pay a deposit (of around 20 per cent) on the house price;
• do I have outstanding debt? – if you’re looking to get a
mortgage, there a few things that put lenders off quicker than
seeing you pull up in a brand new (hirer purchased) car. All too
often lenders have had bad experiences with borrowers with too
much debt and are unlikely to lend. On the other hand, if you have
few debts you’re in a much better position to be considering
buying a home.
2. Should I Be Renting Or Buying?
An age old question, and a really tough one to answer.
Deciding whether or not you should be renting or buying very much
depends on what your expectations/wants are. Generally, when you
rent you can leave and move on almost at will. Buying a home will
not, likely, give you the same amount of freedom. On the other
hand, many believe that paying rent is ‘dead money’ – you don’t
get anything in return. Here, buying a home means that with each
mortgage repayment you add equity to your investment and are one
step closer to owning your home outright.
3. What Should I look For When Buying A Home?
The answer to this question very much depends on what you want out
of your home. If you want to buy a home downtown (for example, to
be near the office), then you’ll need to take into consideration
traffic networks. Alternatively, if you have a young family and
are looking to buy a home in the suburbs, you’ll likely need to
consider issues such as:
• schooling for your children;
• after school activities;
• community activities;
• neighborhood issues (including crime in that neighborhood); and
• how you feel your family will fit in with the neighborhood.
4. If I Decide to Buy A Home: How Much Can I Spend?
This depends on how much savings you have and how much you earn.
In short, when considering whether or not to lend to you mortgage
companies tend to lend up to three times the borrower’s annual
salary. However, each lender is different, and this should just be
a ball-park figure for you to consider. You’ll also need to keep
in mind the fact that your lender may require you to pay a deposit
of around twenty percent, which should go some way to determining
how much you can afford to spend on buying a home.
5. Should I Use A Real Estate Agent?
Yes. There are so many aspects with buying a home that it is
always prudent to use a real estate agent. The real estate agent
can then help you with:
• finding the best home to suit your needs: not only will
this include finding the ‘right’ neighborhood for you and your
family, but it should also include making sure the home best suits
your needs. When considering this issue, keep in mind (i) is there
enough room for furniture; (ii) are there going to be enough
bedrooms and bathrooms (especially if you have young children,
who’ll grow up to be old children soon enough); (iii) is there
enough car porch space; (iv) is the garden big enough; (v) does
the roof leak!;
• putting down an offer price on the home;
• finding a mortgage lender;
• the home inspection: a home inspection is when you get a
professional to inspect the home you’re looking to buy to see if
there are any faults with the home. If there are, this is the time
when you can ask the seller to rectify those faults before you go
ahead and buy the home;
• the final walk-through (after your offer has been accepted –
when you’ll need to examine the home to make sure it matches with
all of the seller’s warranties and any correction you asked to be
made following the home inspection have been made); and
• any remaining closing issues that may be outstanding.
When deciding which real estate agent to select, it is always
advisable that you seek the opinion of other family members and
friends to see which real estate agent they have used in the past
– and which real estate agent may have experience in the areas in
which you are looking at buying a home.
6. Are There Any Benefits In Buying A Home?
The most common cited benefit of buying a home is the income tax
deduction you’ll receive. However, many home buyers like the
non-financial benefits that come with buying a home; such as: (i)
the security of knowing the home is theirs; (ii) the home is
theirs to do with as they wish (normally, when renting, you cannot
paint and decorate at will). This kind of security is rarely felt
when renting a home. Finally, once you have bought your home you
really do become part of the community you live in!
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