Taking that big, important step in buying your own house is really a big deal – it means you’re a grown up and now have a place to call your very own!
However, in-between dreaming about that house-warming party and conjuring up images of what you’re going to achieve with your new garden, there is a whole lot of work and planning that needs to happen first – and you need to be open with yourself.
To help you out (as we always do), homify has drafted some key questions you need to ask yourself before signing on that document – even before you start searching for the perfect house.
So, fill up that cup of tea, have a seat, and scroll on…
Determine your budget based on what you can afford to repay now, and not the maximum you're allowed to borrow from the bank. Even if you’re optimistic about earning more a year or two from now, circumstances could increase other expenses in your life, such as children, new cars, travel plans, etc.
Ensure there will be room in your budget for you to live the life you want.
If children are a possibility in your near future, then consider the school districts of your prospective home. And imagine yourself raising a family there.
It takes approximately five years to make your money back on your closing costs alone. And keeping the house for more than five years can save you from losing money on your upfront investment.
This is important if you’re considering having kids, but also if you want to rent out the property you’re considering buying.
And make sure the area has high-yield rents, like a university campus nearby. This can help your property being rented quickly and consistently.
After two people sign the property deed, the equity is 50/50. This means that should you want to sell the house thereafter, the profit will be split in half, regardless of who put more money into the house.
Equity is the difference between what is owed and how much something is worth (after selling it).
For example, if you own a house worth £100,000, and you have a £90,000 mortgage, your equity will be £10,000 – which means you get to bank £10,000 in profit when you sell.
Why not? They can give you an idea of how much your closing fees would be based on the house’s location, size, etc. This will also help you realise whether you actually have enough money to buy that house.
If you want to renovate and sell that property, make sure that your home renovation costs don't exceed the market value of the house.
You want to be able to at least make back what you put into it.
It is important to get pre-qualified for a loan, as the bank or loan officer will give you an idea of your financial situation and if your salary is fit for a mortgage.
Speak with the mortgage representative at your bank, or set up a meeting with a professional loan officer.
Some people will tell you that renting property is throwing money away (and paying off somebody else’s house), but don’t forget that not being tied down to a property has its advantages, particularly if you move around a lot.
Only you can decide this one.
Although there are certain evaluations you can conduct yourself (like knocking on walls to see if they sound hollow, or checking that the toilets flush properly), it's best to hire a thorough, licensed home inspector to pinpoint any major issues. You don’t want to commit to a huge property with costly repairs down the line.
To avoid conflict, ensure your lawyer is not also representing the seller of the house.
Trust your instincts and do not be afraid to walk away from a bad deal. Remember that this is a financial transaction that goes both ways, and your (reasonable) terms must also be met.
There will always be other properties down the line, maybe even better ones.
You can always use an agent to negotiate on your behalf, although you’ll never be sure just how hard they will push for you.
As a buyer, you should feel in control and as though you have nothing to lose through a bit of hearty negotiation.
Don’t feel pressured to buy something you are not 100% satisfied with. Estate agents are expert salespeople and may rush you to snatch up that ‘perfect’ house before someone else grabs it.
As long as you don’t dawdle for too long, time is on your side!
Prepare a list of questions in advance before your meeting with an agent (Google can help with those!). Find out what kind of experience they have, how many buyers they're representing, and if they can provide any references.
It is your right to speak to a few agents before deciding on one.
The search for that perfect house can take longer than you think. Don’t make commitments that will rush you, like telling your landlord you’ll be moving out before you’ve even started looking for a new home.
Potential sellers, we cater for you as well – see how you can: Add Value To Your Home The Easy Way!