03 Dec 2009
How to Buy Your First Property
These costs add up quickly and if you are not financially prepared, you may end up in a very negative position.
If your in debt, get out of debt (such as credit card debt) and save up an emergency fund before you purchase your first home, not forgetting the down payment!2) Begin to shop for a home loan by talking to a mortgage advisor, they’ll be able to indicate how much you can borrow based on your earnings, your current financial commitments and any savings you may have. This will help you to look within your property price range.
You should contact at least three mortgage advisors before you decide which loan to take.
A mortgage broker will look at several different home loan companies to find you the best rates, However your small local bank or your credit union may have options that will save you money as well. Once you find a loan with the correct terms you can begin your hunt for a property.3) When it comes to your mortgage you may be surprised at the different loan types, deals and payment options. Usually a fixed rate mortgage loan for fifteen or twenty years is the best option, which can help you lock in a low rate for a good amount of time. You may be considering creative financing to cover the down payment but you should be careful when you make these choices as you want to build wealth with your home purchase and a wrong choice might you end up hurting you financially.
Always find out roughly how much you can afford in monthly repayments by compare your incoming salary with your outgoing expenses. The figure you get when you subtract all of your expenses from your income is your disposable income, you should ensure that this surplus income is sufficient to meet all your requirements.
4) A good rule is to keep your mortgage along with your taxes and insurance between twenty five and thirty percent of your income. Other experts advise that your home cost be limited to two and half times your annual salary.
It is important to realize that you need to include the cost of taxes and home-owner’s insurance into your monthly housing cost.
With the insurance and taxes your monthly housing costs should not be more than thirty percent of your monthly salary.
5) Solicitors are one of the main professionals needed in the home buying process, you will also need a valuation report and / or a surveyor’s report.
Get a home inspection, this will bring up hidden problems within the home ( property ) which you can learn about any issues that may prevent you from buying the home. This may include mold problems, termites, foundation problems and or a bad roof.
The inspection can save you thousands of pounds in repairs and additionally you may be able to negotiate a lower price for your property.
6) Once the offer as been accepted buy the home sellers or property auctioneers your solicitor will do the rest. Remember a solicitor is there to make sure that all documents, money and other necessary information is together before you sign and to protect the buyer, the seller and the lender.
7) Once you have closed on your home, it is time to move in and do what ever you want in it under council rules and regulations but you can paint, unpack and enjoy your new home. Be sure that you change your utilities and cancel your old ones as well, this will save you time and money because you will avoid late fees.
Good Luck, Happy home hunting and congratulation on your new home.
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