Tuesday, November 17, 2009

Important Tips for First Time Home Buyer

Sometimes buying a house can be a very long and tedious process, no matter if you are a first time buyer or repeated buyer. Buying a home can be one of the most important investments in your life. It’s important to take the time and do it right, from your finances, loan type, to the decision of which house to choose. These are some steps to help you go through the process.

1. Before starting to go out looking for properties, be sure to have your finances ready beforehand. Take a good hard look at your credit report, as it will have a major impact on the amount and kind of financing that you can get. If you find any discrepancies in your credit report, now is the time to get it taken care of as quickly as possible for applying for home loan.

2. Secondly, to know exactly what you are looking for before you even get started, take out a piece of paper, sit down and carefully list all of the most important features of the home you need in your life.

Where do you plan to stay? Does it need to be near a certain school district? What size home will be needed? What size garage should it have? Do you want a one story or multi-story home? How many bedrooms and bathrooms should it have to accommodate everyone in your family?
There are plenty of other questions that you could ask yourself at this point, so try to get a clear picture of the kind of new home that you would like by brainstorming in advance..

3. What kind of property that you are interested, depends on your personal finance. Your monthly loan repayment and the down payment (including moving cost and renovation) will guide you to what type of property you are afford for. I personally prefer to go to the actual site and evaluate and analyze the neighborhood if its for own stay. No point having a beautiful house with a dreadful and terrible neighbours and surroundings.

4. How do you plan to finance your purchase? This is where you should start shopping for housing loan. Different banks have different loan products, with different offers and interest rates. Make sure you study and compare all the rates including the terms and conditions. Ask yourself, whats more important to you, is it the monthly installment or the flexibility or the long term saving? All these makes a different in what kind of loan you choose and what property price you can afford to buy. For example A wants to buy an expensive house but with a lower installment, so he opts for a longer tenure or lowest interest rate. Whereas B wants to finish the home loan in the shortest period, so his monthly installment will be higher.

5. Once you decided which bank can give you the best deal, get a pre-approved home loan. This process will also help determine what price range you can afford. it is also to ensure that after placing the booking fee, or placing an offer to buy, you have secured a pre-approved loan with a sure rates. Bearing in mind, the next step of getting the loan approved will take as early as 1 week to more than a month.

6. Deciding on a loan and the processes is a headache. But don’t forget the paperwork, documents and contracts that you need to sign after that, payment of legal fees, and stamp duty are also another headache. In brief there’s a minimum of 3 contracts that you should know, one being the Sales and Purchase Agreement (with the developer/seller), the Loan Agreement (with the financier) and there’s also a Transfer of title (between seller and buyer). As simple as it looks, trust me, it is not! There’s more to it that you can possibly imagine. So do talk to your real estate agents, or your lawyers to know more and ask them to brief you what are the possible scenarios and what are those documents you are signing into means.

7. All said and done, please also do make sure you have extra cash for all the miscellaneous charges and fees that could come up from your deals (buying a home). Some developers do offer to bear the charges of legal fees and stamp duties, so please make sure you understand clearly what you need to pay before entering into the sales and purchase agreement. You better be safe than sorry. An extra cash in hand is always better, afterall you still need to plan and set some cash aside for the renovation.

Buying a house can be a little intimidating andmany factors to take into consideration. It best if you can do your research not only on the property you are buying into, but also the processes and money involved. These will help you stay on track and ensure that you get the best deal and smooth handling of the processes and end up happily with you dream house.

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