Buying a House
Most people dream of having their own home all their lives. However, when the time comes to make this dream a reality, most people make mistakes. Buying a home requires a lot of hard work. An overwhelming majority of people would not be able to buy a home if it were to be bought on cash. However, you should have a substantial amount as down payment against which a bank will advance you a loan called mortgage. Most banks require 20 to 30 percent of the property value as down payment. Duration of mortgage offered by different banks varies from 15 to 30 years. Higher the down payment you make, easier it will be to get a loan and lower the interest rate and the down payment. It is advisable to meet a loan officer before setting up a meeting with an estate agent to make sure you have a fair idea about what you can and cannot afford with your current financial situation. You should weigh all your options before deciding to buy a house. Sometimes it makes more sense to rent or lease a property than to buy it for example if you are planning to move in the near future buying a home may not be the right option for you.
Think of an area you would like to live in terms of the neighborhood rather than limiting your imagination to your block only. Make sure you have all the required facilities such as schools, shopping malls, cinemas, grocery stores etc. within reasonable distance. Acquaint yourself with your potential neighbors to get a feel of the area. Visit a number of houses before deciding a specific house you like. This will give you a fair idea about market prices of properties in various locations and will help you decide what type of house will be most suitable for your needs including total area, number of bedrooms, bathrooms, and storage space and kitchen amenities. Thoroughly research the location of your home because it has a profound impact on its resale value. Do not rush to buy the first house you like. It may be the most costly mistake of your life! Make sure you are satisfied with your purchase in all aspects. Hire a professional home inspector before finalizing your purchase to minimize the risk of pests, dry rot, toxic materials, landslides, flood, and earthquakes.
The rule of thumb is that you can afford a house worth around three times your annual salary. A common problem for single people looking to buy homes is excess capacity. They rarely find a home in accordance to their needs and almost everything available is more than their existing needs. A good solution for such people is renting out part of the property. This will help reduce costs, as the rent will contribute to monthly mortgage payments. Monthly installment of the mortgage loan vary from 0.75 to 1.15 percent of the purchase price depending on a number of factors including your credit rating, purchase price, duration of the mortgage and down payment etc. An integral criterion for choosing or not choosing a home for that matter is location. It is always a good idea to buy home with good schools nearby even if you do not have school aged children. This is because it will help you to resell it readily and at a reasonable price because homes near good schools are almost always in demand. It is integral that you find a good and reliable real estate agent before you start searching for the home of your dreams.
It helps to have an immaculate credit history in case you are applying for a home mortgage. Mortgage financiers will most likely review your credit history with a microscope before approving your loan. Lenders will also be concerned about sources of funds for down payment and closing costs. A strong financial background goes a long way to help you get a mortgage loan more easily. The thorough check carried out by the mortgage loan companies includes a look at your bank statements for the past few years including statements of your checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds and other assets. Home prices are affected by a large number of factors that affect including location, size, structural condition, number of bedrooms and bathrooms, availability of various utilities such as plumbing, electricity, water and gas etc. Some of these factors are discussed below:
- House Size – House sizes vary slightly in size and number or rooms in almost all neighborhoods. However, this difference should not too drastic. If you have the smallest house in a particular neighborhood prices will most likely increase at a slower making it disadvantageous to your property in comparison to others.
- Bedrooms and Bathrooms – Three and four bedroom houses are the most popular among house buyers. It will thus have the most potential buyers in case you decide to sell it. A three or four bedroom house should have a minimum of two bathrooms i.e. one attached and one powder room.
- Closets and Laundry – Walk in closets are most popular for master bedrooms. Even if the other bedrooms do not have walk in closets there should be ample space for your wardrobe and bed linen.
- Garage – Ample garage space adds to the resale value of your home. Most people prefer homes with at least a two-car garage. Three car garages have recently gained popularity in posh areas.
- Kitchen – Kitchen should be well equipped with all modern amenities. Larger kitchens are more preferable than smaller kitchens. American style kitchens are readily replacing conventional kitchens.
- Fireplaces – More fireplaces a house has higher will be its price. Fireplaces are most commonly found it living rooms.
- Swimming Pool – Families with small children tend to avoid swimming pools because of safety reasons. Swimming pools are no longer seen as adding much value to a property as they once did.