It is needless to say that all first time home buyers haven’t ever gone through the intimidating experience of purchasing a home and they’re often advised about the hard way that making a single wrong decision can take a costly and stressful toll on your future financial life.
Buying a home involved different steps like getting pre-approved for mortgage loans, finding the right mortgage agent, looking for the right home that is within your means, following a frugal budget while repaying the loan and facing some sort of financial challenges. Are you scared by reading the aforementioned steps? Well, you need not fret as once you get a grip on the process, everything will tend to fall in its place.
Check out some vital essentials that you need to know about the process of taking out a mortgage loan, being a nascent home buyer.
- There’s more than just making the mortgage payments: Whenever the novice home buyers feel that they’re ready to take out a mortgage loan, they immediately take the plunge. But the fact is that just because they can afford the monthly mortgage installments doesn’t make them ready to own a home as there’s more to it than making just the monthly mortgage payments. Taxes, home owner’s insurance fees, maintenance costs, property insurance, water and electricity bills are some of the other costs that are added as a bonus when you buy a home mortgage loan. Moreover, insurance costs and property taxes tend to rise every year. So, even if you think that you will be bear the mortgage loan now, ensure whether you’ll be able to bear them throughout the term of the loan.
- Always seek professional help to stay safe: When you’re someone who is new to the home buying game, you’ll probably need the assistance of a trustworthy loan officer, a lawyer or might be a reputable real estate agent who can guide you through the process of locating a home and a mortgage loan. If you take the risk of venturing into this game all on your own, this won’t be rather a wise idea. Hire an agent after checking out the references from the previous homebuyers and then take the decision of hiring him.
- Search for the mortgage first and then for the home: If you were of the notion that homebuying begins with searching for a home, you were wrong. Homebuying actually begins with getting pre-approved for a mortgage loan unless you’re rich enough to pay down the entire money in cash for your house. Most often it is seen that the first time homebuyers get scared to get pre-qualified for a mortgage but this shouldn’t be the case. You might approach an FHA lender for getting a loan that is backed by the FHA if you don’t have a huge down payment and a stellar credit rating.
- Never burn out all your savings for the down payment: When you’re a first time homebuyer, you tend to listen to all that which is advised to you. People usually scare you about the practice of qualifying for the PMIs when you fail to pay down 20% of the total loan amount. But this shouldn’t force you to shell out all that you have in your savings account for making the right down payment. Being left with no savings is a curse and this will also take a toll on your future payments.
So, when you’re about to purchase your first home, you must be super excited. Don’t spoil the deal by taking any wrong steps. Keep in mind the above mentioned tips so that you may avoid the most common mistakes that can wreak havoc to your personal financial state.
Author Bio: Shane is a financial writer,he has also made notable contributions through various articles written on different subjects related to the real estate industry.This article is about the Mortgage loans for the nascent home buyers.
The most common mistakes while hunting for your dream real estate property
Buying a real estate property is a daunting, intimidating and also an emotional process at the same time. But if you make the mistake of allowing the emotions to get the upper hand, you may become a victim of the most common mistakes while buying a real estate property. Buying a home has got far-reaching implications and therefore you have to take some important decisions so that you don’t land up in a mess. Usually, mistakes during buying a real estate property usually stem from emotions and if you can put back your emotions under control, you can successfully buy a housing property with ease. Here are some mistakes that you need to take into account when you’re buying a real estate property.
- Head over heels in love with a property beyond your affordability
It is usually seen that once you’ve fallen in love with a particular real estate property, it is pretty tough to get back. You start dreaming about that house and everything about it. But something that you forget in the meanwhile is that you need to buy a home within your affordability. When it comes to buying a house, you have to be sure about the fact that you need a mortgage loan too. Therefore, falling head over heels in love with a property way beyond your affordability is a bad financial move that should be avoided.
- Assuming that there’s nothing better than what you’re seeing
Unless you’re someone who is a high-end buyer who’s only looking at custom homes, chances are high that for any home that you’re looking to buy, there will be similar identical homes that are also there. Thus, assuming that there is nothing better in the market and that the one that you’re checking is the best one is actually wrong. Check the neighborhood nicely so that you may get a real estate property that comes in with all the features that you need according to your budget.
- Rushing in to stroke an offer on the real estate deal
In a hot real estate market, it may be necessary to complete the deal when it comes to looking for a home. But you have to maintain a balance within your decision as hasty decisions always lead to sorrow. While hurrying, make sure you don’t neglect some important steps like checking your neighborhood area, checking the transportations available and the distance of your home from the nearby school, college, parks and other important places. Only after you check all such details should you take the decision of buying that house.
Therefore, when you’re in the market to buy home for sale, you should take the above mentioned factors into consider. Also get pre-approved for a mortgage before you start shopping around for a mortgage so that you may know the limit up to which you can search for a real estate property. You can also determine your affordability this way.
Shane Parker, Guest Blogger for The Real Estate Savvy
Shane is a financial writer, he has also made notable contributions through various articles written on different subjects related to the real estate industry. This article is about the most common mistakes while hunting for your dream real estate property.
Real estate and investment – What are your options?
Real estate is not that tough a field for you to invest your money, this is because, you can simply start off with renting out the parts of the home you live in. so, there’s no doubt that real estate investment is quite a popular investment option, for you to invest your money and therefore generate some extra income. Other than renting out property, if you have become more confident on the investment options, you can try out the other ways too.
Different investment options
Some of the most common options through which you may be able to invest your money within the real estate market and then let it grow are:
Real estate investment trust or the REIT – You will be required to become the member of the corporation, with regards to the real estate business. This trust involves the trading of the major exchanges and the properties acquirement is done mainly with your money. It helps you in generating a regular income, and it also becomes easier for you to get the required exposure, with regards to those of the non-residential buildings too.
Investment groups – These are more like investing your money within the mutual fund, where you are actually required to become a member of the investor groups. You thus, will be required to let out single or even the multiple units, to the management company, which you owe. The company then is going to acquire your property and maintain it too, other than renting these out.
Trading – You can simply buy and resell properties within little time span. This also is known as ‘flipping’. You would not be required to spend any money in order to develop the real estate property. However, as this basically involves quite a large amount of money, this can even result in huge loss.
So, you can see that there are various options through which you may be able to invest within the real estate market.
However, before investing in the real estate market, you will also have to consider the different pros and cons which are associated with it. These are:
Pros associated with real estate investment:
Cons associated with real estate investment:
So, based on these factors, you will be required to decide which way you are going to invest your money in the real estate market.
Shane Parker, Guest Blogger for The Real Estate Savvy
Shane is a financial writer,he has also made notable contributions through various articles written on different subjects related to the real estate industry.This article is about the importance of Real estate and investment.