7 Things You Must Do Before Buying a House!
Before you consider purchasing a house, there are many things you should consider. A lot of people equate buying a home with a dream purchase, however, if you have not done your homework well in advance, it can quickly turn to nightmare. We have broken down seven key factors that you should consider before even considering buying a home. Buying a new home is an exciting time for many people, especially first time home buyers. But, you need to keep in mind many other factors that play into this large decision. If you prepare yourself, you will be much better off and well ahead of many other people when you go to sign off on a new mortgage.
Know When the Time is Right
Know when the time is right. This may be earlier in your life than you may have thought it’d be, or it might be much later. Assess your situation and make an informed decision. Make sure you look at your life from all angles, so you can figure out whether the time is right to purchase a home. Buying a home can be a major stress on your life, and you need to be ready to deal with all of the little things that pop up during this time. You need to remember that homes require A LOT of time, money, effort, and energy to purchase and maintain your home. Many people do not keep in mind the work that goes into a home before they purchase it.
Review Your Credit Score
You should review your credit score and get an updated report well in advance of purchasing a home. There are many stories out there of people not reviewing their credit report before purchasing a home and then being denied an opportunity because they had low credit. You do not want to be in this situation, especially if you have put in so much work finding a home that suits your needs. There should be no excuse not to check and review your credit score as there are so many different places you can check it for free online.
Address Weaknesses in Your Credit History
Make sure that you start paying off any outstanding debts you have if you find out that you have consumer debt of any kind. Keep in mind that if you are debt free, but you have no credit or very little credit history, that you will need to start establishing a solid credit record to even have a chance at purchasing a home. Stay on top of all your payments so that you have a good track record of making payments on time. You do not need to be debt free to purchase a house, but you must have a proven track record of making your payments on time, and proof that you are trying to lower your debt. The better credit score you have, the easier it will be to purchase a home and get better mortgage interest rates.
Purchasing a home can be very expensive, and the best way to counter the expense is to save up as much money as possible first. By living below your means for a while and stocking away money in savings accounts and investments, you will give yourself a chance to pay off most of your home right away. Believe it or not, there are a lot of people out there who are able to save up enough money to flat out buy their dream home with cash. This requires discipline on your financial front, to make sure that you are not only saving money but making money — i.e. TFSA accounts. You do not necessarily need to have that much money saved up to buy a home, but make sure your taxes are paid off in full before applying for a mortgage and that you have enough saved up for a proper down payment in your financial range. Make sure you can afford the monthly mortgage payments and any loans that you plan on taking out; this is something that you can review with your financial advisor in detail.
Recognize the Responsibilities
Remember that when you purchase a home, your living expenses will automatically go up. You are not just purchasing a home, but to a certain extent, you are now in the ‘property management business’ as well as being a homeowner — you will have to take care of all the other expenses that come with maintaining a home. Many first time buyers are not prepared for the extra financial burden that comes along with owning a home. Aside from the general household maintenance on systems such as air conditioning, heating, plumbing, and any electrical, you will probably have to replace these over a period of time. Make sure you set up a savings account with your bank, and put money into an account to take care of these things when they need replacing.
Never stop learning! Before you begin looking at homes, educate yourself on the buying process. Many people get into the housing market and they have no idea how to start the process. If you have already found a REALTOR® in advance, make sure you ask them how the buying process works in detail, that way you have a better understanding of how to go about purchasing your home. There are also so many different websites, blogs, and forums online, where you can find a variety of information on the process. Do your homework!
Interview a Buyer’s Representative
Make sure that you select a qualified real estate professional who represents you well. Make sure you spend some time figuring out who you would like to represent you, as this can make the biggest impact on whether or not you get the home that you are looking for. Look for a REALTOR® who is knowledgeable, professional, honest with you during the process, and willing to go the extra mile to find you what you want.