Buying a house is hardly a breeze, especially for first-timers. But you need not be a real estate specialist before you can do it correctly. Below are pointers that can be helpful:
Know the deposit amount you have to prepare.
Prior to looking at properties, be sure you have set aside money for the deposit. Usually, you must save 5% to 20% no less of the price of the house you want. Saving over 5% means you have access to more cost-effective mortgages that you can find on the market.
Know how much must be paid for the other costs of buying a home.
Besides your monthly mortgage payments, there are others costs that you also have to cover when buying a home. These include, among others, survey costs, removal costs, initial furnishing and decorating costs, etc.
Ensure that you can afford required monthly repayments.
It’s smart to have a budget prepared before you begin searching looking for a property. The mortgage approval process has become very strict these days. Lenders are going to do a background check to see whether you can pay the mortgage, as well as ‘stress test’ your financial standing as though your circumstances were different – for instance, if your business suffered or if there was an illness in the family.
Get to know government-supported home-buyer schemes.
Many government-supported schemes offer financial assistance to home buyers. Though you may use any of these schemes, remember that lenders will still want to make sure that you can actually pay your mortgage.
Find a good mortgage.
There are various mortgage deals you can pick from, so it can be tricky for you to choose one. For one, there are so many things you have to consider, so you really have to do some research and even talk to experts, such as mortgage brokers.
Difference between Freehold or Leasehold
If your plan is to purchase a house, you’ll likely buy the freehold, which means you will own both the property and the land where it sits on. If you’re purchasing a flat, that means you will pay for leasehold, or buy into a portion of the freehold.
Getting a Mortgage
Regardless of the mortgage you apply for, the lender will want to know whether you can continue making repayments even if interest rates increase, or if there are any unexpected events that would reduce your financial capacity. To prove that you have the income you have stated, you may have to submit bank statements and payslips. If you’re a businessperson, you may be asked to prepare tax returns and business accounts in the past two tax years through your accountant.