Indeed, buying a home is a major decision, and no one should take it lightly. It could very well impact your life for the next decades, and if you make an improper or hasty choice, you could end up with a piece of property which isn’t really the right fit for you or your budget. Purchasing a home is the dream of many individuals, and rightly so – but it has to be done in the proper way. This is particularly true if you are buying a home for the first time; there are many factors which you should seriously consider, and this includes the deposit, your overall budget and the expenses associated with purchasing a home, the mortgage, and so much more. So, are you buying a home for the first time? Here’s what you should really know.
Before you even begin to look at any property, you should make sure that you have a deposit. In general, it would be ideal if you could save about 5% to as much as 20% of the value of the property. To give you a better indication: if you want to buy property worth $150,000, then you would need to have a deposit of at least $7,500, which is 5% of the home’s cost. Of course, if you can save over 5%, this will help you get a better mortgage deal as well.
The costs of purchasing a home
Aside from your mortgage payments every month, there are other costs and expenses associated with buying a property. You need to be prepared for this as well, and this includes survey fees, the solicitor’s fee, the cost of removal, building insurance, the cost of furnishing your home and decorating it, valuation fees and mortgage arrangement fees, and stamp duty tax. If you are purchasing property for the first time, however, you do not have to pay stamp duty for the first £300,000 for a property worth about £500,000.
Of course, as a homebuyer for the first time, you have to make sure that you can afford to settle the monthly payments for your new home, as confirmed by Clifftons, specialists in houses for sale in Bournemouth and other key areas. You have to determine your overall budget by making a list of your monthly income as well as expenses and figuring out how much you can pay for your monthly mortgage. Also, bear in mind that when you apply for a mortgage, you will undergo a stringent check. Mortgage lenders will assess if you can afford to pay for the mortgage as well as test your ability to settle payments even if there is a rise in interest rates or if you have a change in circumstances. As part of the process of applying for a mortgage, you will also have to show the mortgage lender any evidence of your outgoing expenses as well as prove how much salary or income you make per month.
Preparing for the application process
Also, here’s what you should know if you are planning to apply for a mortgage: as already mentioned, lenders will thoroughly check your income and expenses, and you will need to provide them with proof of income as well as your expenses, which include any debt you may have, your household and utility bills, and other expenses such as childcare, travel, clothing, and so on. To give evidence of your income, you will have to provide such things as bank statements and payslips.
Buying a home isn’t an easy process – but if you are determined to have your own property, it pays to be prepared – and preparation is the first step to getting that home of your dreams.