Buying a new house is not the same as buying a pair of shoes. First, the cost is exponentially increased. You cannot buy a house on a whim as you can buy shoes. A whole lot of budgeting has to be done.
Secondly, if you decide you do not like the shoes anymore, you can give them away without feeling the pinch, or, if they are still brand new and you have proof of purchase, you can return them to the store if you discover a defect and get a new pair. None of these options is available to you once you have bought your house.
A house is a life-long investment. For most people, it becomes a home where memories are made and children are brought up. It is a haven and a place where you are always welcome (if you are a member of the family that is). Seeing that it is so important, you must get it right when buying your new house. Follow these tips and you are likely to avoid the common pitfalls that most new homeowners face.
Unless you have been saving up for years or are filthy rich, you will probably need a home loan to be able to buy a new house. This is a perfectly viable option, but you need to do your research thoroughly to avoid disappointments.
Default in payments of some home loans might lead to the repossession of your house, and you wind up losing everything. If you do not have enough money to make a significant down payment towards the house, the lending company might require you to take out mortgage insurance to make sure they can recover their money if you fail to repay.
Have all these considerations in mind as you decide on your method of financing. There are many mortgaging companies offering home buying loans. Weigh their pros and cons and make the wisest decision.
2. Make a shopping list
Just as you would when going to buy groceries, you will need to come up with a shopping list of what you want for your house. Do you need a large space for the family? Alternatively, will you spend most of your time away and just need a comfortable place to relax at times? Do you want a mansion or an apartment?
These are things that you will need to determine in your mind before you embark on your journey to owning your new house. Knowing what you want will help you to compare prices and come up with a budget that you are comfortable with and which can get you comfortable accommodation.
Another thing you will need to determine, perhaps as part of the shopping list or as something separate is your location preference. Several factors determine this.
First of all, you will want a place that is convenient in that you will be able to access your place of work or school or wherever it is that you spend your days easily. Convenience can also be gauged on how easily you can access utilities such as the grocery store or hospital from where you are.
You will also want a secure place, where you can sleep soundly at night without fear of violence and crime. Some people also look to move into their neighborhoods where their friends or families are, making it another determining factor.
The location you settle for will also have an effect on the value of the house you will buy so keep that in mind as you make your budget.
4. Be ready to adjust
You might be required to adjust your expectations to fit into your budget. One of the worst mistakes that a buyer can make while buying a home is to overspend, so you might be required to adjust what you want.
If you must get a house in a particular neighborhood, then your budget might dictate that you choose a smaller one. If you must have a big house on the other hand then you might be required to change your location preference. Be ready for such occurrences and act appropriately but whatever you do, do not overshoot your budget.
What is a Home Buyer’s Survey?
So you’re buying a new home. Well, don’t you want to know how well built it is? You wouldn’t buy a car without a once over from a mechanic to see how good of condition it was in.
Home’s like cars, have a lot going on you can’t see and a home buyer’s survey turns you from being a tire kicker into something a lot more. Older homes and homes with specific additions such as timber homes, or thatched homes are often more likely to have major structural defects with them.
In turn, this means that if you purchase one of these houses without performing a survey you are at a far higher risk of buying a home that has a severe problem. Homebuyer surveys reduce the likelihood of this happening immensely by checking the home for faults.
Unlike home buyer’s reports, which are essentially a once over, the home buyer’s survey is an in-depth report that takes absolutely everything you can think of into account. Home buyer’s surveys are performed by the Royal Institute of Chartered Surveyors and look in-depth into the problems a home may face. So, what’s involved in these surveys?
- All major indoor features from ceilings, walls, woodwork to floors, and floors are checked for problems.
- All of the outdoor areas are also checked profusely for problems, from the gutters to the rood to the windows and doors.
- The report goes through all the central and important areas of the home. It rates them from 1-3 in order of how they are with 1 meaning no repair is needed and 3 meaning the area needs urgent attention.
- These surveys also perform a check of all the heating areas, as well as the electric, gas, and water services running to, from, and inside the home.
- It will also let you know should you need to consult a legal advisor and includes a valuation of the home.
The homebuyer’s survey something that can shed light on the purchase of a home and is especially useful for homes that are older, or have unique features that may not be tried or tested in their current climates. The home buyer’s survey can save you a lot of money and though it may cost a lot, it is often worth it and can help to sell property fast. People regularly uncover issues that cost ten times the price of the survey to put right, saving them a lot of hassle and cash in the long run.
Insurance companies often request these surveys; this is to ensure a home they may consider a risk for certain reasons is okay to insure and is not likely to have a fault. They will be suspicious as they won’t have to pay a large sum should something go wrong. The results of these surveys are long and detailed and though they may seem intimidating at first, usually tend to be the worst-case scenario. This means that unless stated by the surveyor, problems are usually fixable for little money, or may not come about at all.
However, understanding what a building survey is and when it is required can save a lot of time, worry, and money.
Steps to a Luxury Home Purchase
If you’re finally feeling like you’ve made it and have started eying the realty section of the classifieds for your dream home, life is probably pretty exciting right now. Homes come in all sorts of shapes and sizes, with all kinds of price ranges. But you’ve made it, and you want the best. Shopping for high-end homes can be different from regular house shopping—and not just because they cost more.
First Step: Get a Real Estate Agent
Not just any agent, but one who specializes in luxury real estate. Imagine flopping down a huge wad of cash for a dream mansion, only to discover that you paid a half-million too much. Or that underneath the shiny exterior there was a major water damage problem. Getting an agent will help you get your ducks in a row—their experience will help guide your decision and make sure you make the right decision.
Second Step: Recognize What You Can Afford
While the agent will help with this, remember that you’re not just purchasing a house. Even if you have millions of dollars in the bank, you’re likely going to use a loan. And interest rates on expensive mansions are high. Use a home loan calculator to see how realistic all the moving pieces are. A mortgage loan calculator showcases how interest rates and timeframes affect how much money you’ll end up having to pay a month.
Don’t forget that you are upgrading—that means more space to fill. Unless the home comes furnished, you’re going to find yourself needing to find furnishings for a much larger building than you’re currently using. This adds up quickly.
Step Three: Get it Inspected
You think you have it—the perfect house for your budget and needs. Before you agree to the purchase, make sure the house passes the appropriate inspections. As mentioned above, everything can look all sparkly and nice on the surface, but nightmares can lurk underneath. You don’t want to find yourself with a lemon.
Step Four: Get Your Loan Approved—and Pay it Back
If you’ve already played around with debt calculators, you’ll know that mortgages are a big commitment. Using a debt elimination calculator will help you see how the specific details impact your new loan will affect you month-to-month. You’ll be able to see with a debt repayment calculator when you can become debt-free by plugging in different payment amounts.
At a point down the road, if you find you’ve got multiple types of debt on the table, you can use a debt consolidation calculator to see if consolidating your debts is right for you.