Tips for buying your first home in Solihull and pitfalls to watch out for
For most people buying a home is probably the biggest and most important purchase they will make in their lifetime. In this article you will find tips on the pitfalls to watch out for before committing yourself to a long mortgage period.
Is the home in a good condition? Make sure the home is in a good condition. As a minimum, the property should be worth the price you are paying otherwise, you are duped. Most lending institutions require a Surveyor to assess the value of the house before they provide any funding but remember this mainly covers structural worthiness and covers mainly the banks interest only. It is worth paying a bit more in getting the property fully assessed and that it is worth what you are paying.
Are any repairs required? It will definitely cost you more if you will be the one to bear the costs of any repairs that is required. If the seller has agreed to do any repairs, ensure that the fixes are not only cosmetic. Pay particular attention for any defects in plumbing, heating, and the boiler system of the home.
Are your brokers credible? Ensure that you’re working with trusted, knowledgeable and experienced mortgage and real estate brokers. It is important that you make your own research first before you work with them.
How much will it cost you? And we’re not talking about the home price alone but everything. You will have to pay for the mortgage application costs, processing of the loan, insurances and a lot more. If you don’t want to go overboard with your budget, you should know this thing.
How’s your credit rating? You really don’t want to mess with your credit score, especially if you’re applying for a mortgage. It will help you obtain a very small interest rate and good payment terms. Make sure that you can pay your other debts on time and that you haven’t filed for bankruptcy in the last 5 to 7 years.
What is your income? Disposable income plays a huge part when it comes to your mortgage. If you have stable and decent income, you can get a better loan conditions for yourself. If you feel like your mortgage is too high for you even if you have a good credit score, you may want to work on your income for a while.
What is the interest rate? You cannot take out a loan without interest charges and it does vary from one mortgage institution to another and in fact even between different mortgage products of the same institution. When looking for loan, make it one of the factors that will determine your decision. You can also watch out for the current interest rate in the market. Ensure that then mortgage interest rate is not far from it. You also need to be aware whether the rate is fixed for a certain amount of time or if it is a variable rate mortgage. On a fixed rate mortgage the monthly payment stays the same while with a variable rate the monthly payment can change if the Reserve Bank changes the base rate.
How much can you afford? It’s always best if you can take a look at your savings account and your earnings before you decide to buy a home. Even if you can afford the mortgage, you still have to allocate whatever amount you have with your utilities, school plans, insurance policies etc.
Where is the home? You may have the most beautiful house in town, but if it’s too far from work, school, and other necessities, it may defeat its purpose.
How much is your deposit? The deposit amount will determine the equity you will get immediately when buying the home. Most lending institutions are now requiring at least 20 to 22 percent before they can approve the mortgage. This is following the credit crunch and the impact it has had on the banks. A huge deposit will mean you should get a better deal on the mortgage, equity in the home and a lower monthly payment.
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