Are you planning to buy a new home? Purchasing a property is both a major emotional and financial experience. Whether it’s your first home or newest property addition, you probably know that it’s not always a smooth transition. Complications and setbacks may occur without notice.
If you’re a first-time homebuyer, here are 7 tips to help you make your home buying transaction easier and smoother.
1. Get your finances in order.
What, where and when can you buy a home will be dictated by your financial capabilities. It’s a must that you get your finances in order so you can work out on what you can realistically afford monthly. Your loans and other credit cards must have updated balances, and you should know your current income and expenditure.
Sometimes it will take a financial adviser, your bank and even a mortgage broker to go through all of this. You should consider asking for their help because a mortgage is a major expense. Unless you got a lot in your account, know you’re borrowing capacity first before starting a home buying transaction.
2. Determine and plan for all the associated costs.
When it’s your first time buying a home, you may be unaware of the costs associated with acquiring a property. Even if an offer has already been accepted, additional costs may still come up unexpected. Some of these are inspections, appraisals, closing costs, moving fees, lawyer fees and property taxes. Make sure that you have cushioned your budget to accommodate all of these and that you have planned for your financial commitments, both long-term and one-off payments.
3. Put together your documents.
Bank statements, tax returns, asset statements, pay stubs and other pertinent documents should be prepared even before looking for a house to buy. It takes time to get these documents that are usually needed to verify your finances during a mortgage application. When you have them ready, your loan can be possibly processed and approved faster. You can ask your local bank or a mortgage broker to know the documents you need to prepare if you’re not yet familiar with them.
4. Prepare for moments of crisis.
You already know that it will not always be an easy transaction. There can be crisis moments that may come at any stage. It may be during your loan application, the day of inspection or on your closing disclosure. You may suddenly run out of liquid capital to put down on your new house, your credit score is unacceptable, or you can’t get your documents on time.
As a buyer, you should be prepared for all of these hurdles that may come your way. Aside from the contingency clause that should be part of your mortgage contract, you should also create contingency plans for whatever possible situation you can think of.
5. Work with an experienced agent.
During your moments of crisis, having the right agent to guide you is important. May it be emotional or logistical, an experienced agent by your side will help you go through your transactions smoothly. He will let you know the ins and outs of the homebuying process.
So when you’re trying to find a new home, you should also find a conveyancer in Sydney that you can trust and you are comfortable with. It’s someone who can help you get to the finish line of home-buying. You can ask your friends and families about their experience if they just recently purchased a property. Word of mouth is surely effective in knowing about trusted agents in your area.
6. Schedule a home inspection.
Before you finalize your purchase, you need to have it inspected to make sure it’s in a good condition. A home inspection usually happens when you reach an agreement with the seller and sign off on the final contract, which should also be before the closing date in the contract. This inspection and appraisal of the house will allow you to address possible issues and renegotiate your offer. It makes you a more informed buyer and saves you money by identifying potential money pits.
A home inspection will also confirm whether a house is the one you’re dreaming of.
7. Review the Closing Disclosure.
Before your loan closes, the lender will give you a Closing Disclosure, usually three days before the scheduled closing. It’s a form that outlines the final terms and costs of your mortgage. It’s no more an approximate but the actual number you would pay.
To review this form, you may want to compare it with the loan estimate and check for accuracy. It’s important to double-check and ask questions about the information written on it because it can spell disaster if left uncorrected. Check for your name spellings, address, interest rate and loan amounts. There might be some missing pages also. Make sure to resolve issues with your lender prior to settlement.
