There’s plenty to think about when buying a home for you and your family. It can seem overwhelming at times, but a few key factors will make the biggest impact on how happy you will be with your first property. The following are factors to take into consideration when buying a home.
Like it or not, buying a house is a serious investment that will impact your financial future. Spending too much could mean taking longer than you would like to pay off your loan, while spending too little could mean a house you’re not satisfied with. How do you determine the best budget for your future home?
Speaking to a lender and getting a pre-approval is one of the best ways to assess your borrowing ability and how much you can wisely commit. Most lenders can do a fairly quick one either over the phone, online or in person. They will ask about your current employment situation, credit history, assets and liabilities, and other financial health indicators to assess how much you can borrow.
When calculating your budget, make sure to factor in fees, duties, insurance if applicable, and taxes as well. Finally, consider that while you may be approved for a certain number, it doesn’t mean you should borrow that entire amount. Make sure to have enough financial wiggle room to put away some savings each month.
In an ideal world, we would all be able to afford the home of our dreams. In the real world, financial considerations means the best way to get what we want is prioritising. Understanding your family’s current situation as well as what may change, can mean the difference between buying a property that fulfills your needs and provides happiness or one that doesn’t and is a financial headache.
Priorities are unique to each family, but factors such as your age, the size of your family, your hobbies and interests, where you work, and your budget can influence what you should look for in a home.
Loan Terms and Options
Picking the right terms and options can help you choose a loan that pays off your property quickly, yet doesn’t put a damper on your lifestyle. Use comparison rates to compare loans between different lenders and for finding the lowest rate. Those who want the absolutely lowest rate can consider basic loans with fewer features, while those who want more flexibility may consider featured loans.
Options such as 100% offset accounts allow homebuyers to have a savings account tied to their balance of their mortgage. Savings in the account offset the balance of the home loan, reducing their monthly payments. Features like these help homeowners pay off their loan without limiting their financial options, but they do sometimes result in a higher base rate, so consider your needs and make the right choice.
Figuring out a budget, setting your priorities, and choosing the right loan are three of the most important aspects when buying a home If you have questions about the home buying process, don’t hesitate to contact a representative at First Home Owners Centre.