For New Home Buyers This article is dedicated to all new home buyers.
It provides helpful tips on buying a house.
By spending time looking into the tips below, you could minimize your mistakes and ensure a smooth buying process.
1) Your reasons for buying a house Are you going to buy a new house for your home stay or investment? If you are thinking of having a rental income, then buying a medium non-landed property would be the best choice.
Otherwise if you are buying for your home stay, then you might rather look for a place or something which can give you a desired lifestyle.
2) Determine your financial capability At this step, you are going to understand your financial background better.
Buying a house will involve your huge sum of money and commitment.
You will either buying with your own cash or home financing.
If you are planning to get a loan, make sure that you are able to serve the estimated repayment.
In fact, you need to have some capital on hand for booking, down payment and other possible cost that will incur.
3) Is your cash flow healthy? Are you earning more than spending? If yes, then your cash flow is considered healthy.
Your cash flow is also affected by your debt-to-income ratio.
It is not good if your total monthly repayment exceeds 50% of your monthly earning.
This would be unfavourable for the bank when you are applying for a home loan 4) Determine your maximum borrowing power Find a mortgage consultant to compute your credit eligibility and obtain a loan 'pre-approval' from any financier (known as the bank).
This is to determine your credit eligibility as well as your maximum loan limit (borrowing power).
With this information, you'll be able to know your affordable price and avoid wasting time searching for houses beyond the price range.
5) Start buying a house! Now you can start searching for houses within your financial capability and credit limit.
However, be careful that there are many houses selling above it's fair value.
Hence before buying a house, it is important to determine it's open market value (OMV).
Perhaps, the house can be overpriced.
Therefore, always remember to bargain for the best price with the vendor.
6) Finalize your home loan application Now you should have your loan being pre-approved by any of the financiers.
When your purchase is confirmed, you will be given probably 2 - 3 weeks time to get loan approval from any financier.
At this time, you should start revising your earlier application details and obtain the latest loan offer from your selected financier.
Then, it will be time for you to accept the loan.
7) Sign up for your mortgage insurance For the purpose of your debt cancellation, you are recommended to sign up for an insurance policy upon the loan acceptance.
This is to ensure your loan will be paid-off by the insurance company if the unfortunate events such as death, disabilities and diseases happened on you.
At that time, your family will be covered from the debt burden.
Conclusion Buying a house could be the happiest thing in life.
Yet, it could be very complicated at the beginning.
If you follow the steps correctly, you could minimize your mistakes and have a smooth buying process.
Good luck!