For first time home owners selecting and purchasing a house can prove to be an exhausting process. Purchasing a house not only has financial implications, but also is a process that should be carried out as per the land laws of the region. In other words, purchasing a house is a strictly legal process that should be carried out in the presence of a real estate lawyer. Thus, many first time home owners opine that the entire process of purchasing a house is a physically and mentally exhausting process.
However, you must take certain precautions while purchasing a house. Steve Liefschultz, who is the Chief Executive Officer (CEO) of Equity Bank Minnetonka, mentions that it is essential to first fix a budget before you go looking for a house. Without a budget you will not be able to decide the type of house that you can afford. Moreover, you must have a precise discussion with your realtor regarding the type of house, locality and your budgetary constraints. Based on the information that you provide, the realtor will be able to help you choose a suitable house. You can also approach a financial institution regarding the type of mortgages that you are eligible for. Thus, there are many points that a first time home owner must consider while purchasing a house and some of these points are as follows:
- Pay the monthly instalments diligently: The mortgage repayments must be done regularly. If you miss out on a mortgage repayment chances of your credit score getting affected increases. Additionally, the mortgage rate is just the premium that you have to pay. Discuss with your financial advisor regarding the hidden costs and other expenses related to procuring an estate loan. It is best that you also discuss this with your real estate agent, to ensure that the entire mortgage value, inclusive of additional expenses is within your budget.
- Understanding closing costs: While purchasing a home, it is not sufficient to merely consider the expenses in lieu of mortgage. There will be other expenses like closing costs, which are inclusive of house tax, association fees and homeowner’s insurance. All of these must be paid in full before you can complete the entire transaction and become the owner of a house. Here too it is best that you discuss your finances with an expert and negotiate the additional expenses as per his or her advice.
- Credit score: Before you can consider taking a mortgage, it is essential that you evaluate your credit score. This will be decided by the financial institution from which you are taking the loan. The credit score will be decided based on your income and any outstanding debt.
Thus, it is essential that you evaluate the entire process of procuring a mortgage to purchasing a house, before you complete the transaction. Steve Liefschultz advises that it best that you first hire a renowned realtor and also approach a recognized financial institute, so as to make the process of purchasing a house hassle free.