Tuesday, April 16, 2013

10 Commandments for Home Buyers

Home Buying1. Don't buy a house... buy a Home
Buying a house means that you are ready to give in to the fate life has given you and finally decide to settle down. When buying a house, don't just think of the aesthetics. Instead try to find the right place for you by thinking of the home you want to build. After all, a house will always only be a structural entity which any person can occupy. But a home is where your heart is and that is what you should keep in mind when looking for the perfect signage of a House for Sale.

2. Formulate a good financial plan and stick to it
Knowing your credit standing is only the tip of the iceberg. Actually owning and paying for the house is a totally different story; which is why you need a solid financial plan that you can realistically stick to. A house loan is probably the biggest financial commitment you will be in at one time.
Map out all the expenses that you are expecting when owning a house. This does not only include the monthly mortgage, of course. You have to put into strict consideration costs of repairs, furniture, property taxes and whatever it is that you will be shelling out cash for. 

3. Do not lose your income.
Owning a house is a solar system of a responsibility. Do not take it lightly. Losing your primary source of income can have devastating effects. You could lose your home! If you absolutely have to leave your job behind for what you believe is a greater opportunity at success then at least have one steady source of income in your household.

4. Do not apply for a mortgage that is more than what you can truly afford
Yes, the mansion was perfect for you wasn't it? Unfortunately, mansions come with a hefty price tag which sometimes is not exactly within the range of our budget. Stick to your financial plans. Stretching your mortgage budget by a little is fine only if you are absolutely sure that it will not affect your financial plans. Anything that will cause you to sacrifice furniture is... well... Not practical anymore.

5. Do not go into debt, especially with credit cards
 loan is a debt no matter the angle you look at it. And debts have a tendency to pile up on top of one another when not met on due dates. With the immensity of a house loan, believe me; you don't want to pile anything atop it. Try to keep the shopping sprees to a minimum, especially if you are on a strict budget. Whatever is not within your financial plan can bite you back in the future so be extremely careful with using your credit cards.

6. Do not overspend on cars, jewelry or other stuff not in the budget plan
Beware of car salesmen, most specially the silver tongued ones! They can sell 4 wheels on a stick if they wanted to! If a car is a needed, do not shoot over your financial plan budget. A house and car loan at one time is a really heavy burden and if you let yourself be swayed by that BMW convertible you are increasing the chances of losing both.

7. Ready yourself with a little cushion/emergency fund
This is actually mandatory for anyone planning purchase their own house. If you do not have emergency savings then you are definitely not ready for a housing loan. A good cushion should give you at least six months of survivability if ever you lose your job and have to find a new one.

8. Insurance is important- Life, disability and health
Accidents do happen. That is one fact of life that is hard to accept. It is best to always have the best life, disability and health insurance you can obtain. In the instance of temporary or permanent disability, a good insurance will be your financial back up. It will ensure that you do not lose your ability to pay for the monthly mortgage and maintenance costs.

9. Do not buy furniture...yet!
Your credit standing will be checked during pre-approval by lenders. However, it does not end there! They will check it again and again, over and over until the deal is finally closed. This is why your credit scores must not change for the worse before the papers are signed ad the house is yours. Put off buying furniture until after the deal to be safe. House comes first, then furniture.

10. Know your credit scores
The first step to take when buying a house is to know where you stand financially in the bank’s perspective. The days when you can loan a house without as much proof that you can actually pay for it is long gone. Banks have become a lot more scrupulous in determining whether or not you can actually afford to own your own piece of property.

Getting your credit scores are quite simple. You can get free reports on your credit from websites such as annualcreditreport.com. You can even file disputes if ever you see mistakes. Just make sure that all of you information is up to date. Remember that the higher your score is, the better off you are in getting lower interest rates on housing loans.

With a good credit score it is easier to go around canvassing for the house of your choice. If you don't have the best credit ratings out there, well it's not hopeless. You will just have to accept that banks will not be as lenient with you and expect higher interest rates. Now, that isn't really all that bad but you are going to have to be more careful in choosing the right house.

Author Bio:

+Lara Seers is a real estate agent for properties in Queensland. She presents buyers with several options and describes each property in full detail to make it easier for them to make the best choice.