Buying a house is one of the biggest life choices ahead of you. When you buy a home, you’re also buying a lifestyle and dreams for your future.
When it comes to buying your first house, there’s so much to learn. You might find yourself overwhelmed by all the information and advice out there. From the right amount of deposit on a house offer to choosing the right real estate agent, we share the top tips that will help make the process easier for you.
1. Start Saving Early
Saving money is a skill that most people don’t learn until later in life. The best time to start saving money for a house is when you are young because it will give you more time to grow your wealth and make substantial investments.
It can be difficult for young adults to start saving money because they have many expenses and not enough income. However, there are plenty of ways that they can save money such as reducing their spending on non-essential items, finding a side hustle, or starting an emergency fund.
2. Decide the Size of Your Home
The first step in figuring out how much money you can afford is to calculate your budget. You should take into account the mortgage and other costs of owning a house. In addition to this, you should also consider the cost of living in that specific area.
If you have a good credit score, it will be easier to get a loan and buy a house. If not, your options will be limited. However, if you are willing to pay some extra money up front or use an unconventional method of financing, such as crowdfunding, then your options might increase dramatically.
3. Compare Different Mortgage and Loan Fees
Usually, the first step in the process is to define what you are looking for, whether it be a specific type of loan or mortgage, a particular interest rate, or a set of features.
There are two main types of mortgage fees: application fees and origination fees. The application fee is the fee charged to cover the costs associated with processing your loan application. The origination fee is the fee charged by your lender to cover administrative costs associated with originating your loan.
A down payment is typically required when applying for a home loan and it can range from 3% to 20%. The higher the down payment percentage you have on your home purchase, the less money you will need to borrow from a lender, which lowers interest rates and monthly payments on your home mortgage loan.
4. Choose a Real Estate Agent
A real estate agent is a person who is licensed to sell property in a particular area. Their license is issued by the local state. They can be independent contractors or employees of a real estate company.
The agent should be knowledgeable about the area and have expertise in the type of property that they sell. In some cases, they will have a college degree in real estate or have taken the time to complete an internship with one of their clients. The agent will not only know about the properties for sale but also what is currently happening in that area and what kind of future developments are coming up. They will also know about other things like zoning laws and regulations, building codes, taxes, and other legal requirements for property purchases in their jurisdiction.
People avoid getting a real estate agent nowadays, as every listed property is one click away from you. But, there are a lot of benefits to hiring an agent. With their experience, they’ll help you get the best offer on a property.
How Much Deposit Is Normally Required?
Lenders require that you deposit at least 5%. You can get a better deal by putting down 10%, but these numbers might increase depending on the area and house prices.
Do not panic if you cannot get the minimum 5%. There are many deals and schemes that can help. Some lenders offer special mortgage deals to help those who have difficulty getting on the first rung of the property ladder. Contact your lender to get more information on this.
Buying a house can be an intimidating process for many people. The idea of having to make payments for years on end, the process of meeting with a realtor, finding a home that matches your needs, and the paperwork involved can be intimidating. But, by following the right tips, you’ll be a proud homeowner in no time.