Most people dream of owning a home of their own, but they don’t know where to begin. When it comes to buying a property, small mistakes can cost big. So we’ve brought you some tips and tricks to save, squeeze critical information from sellers, deal with hidden costs and save on legal costs.
1. Do you really need to buy?
The critical question you should ask yourself is whether you really need to buy. It is unwise to buy if you can’t stay put. If you are not sure of staying in the area at least for several years, buying one of the homes for sale in Temecula ca is probably not for you. Considering the transactional costs of buying a property, chances of losing money if you decide to sell the house sooner are very high even if the property market is rising. For Example, it beats financial logic to spend $300,000 (plus mortgage interest) to purchase a house while you don’t expect to live in that area for more than 5 years. Also considering you might spend additional thousands of dollars as legal and consequential fees, the figure might jump to an additional $2,000-$5,000. On the other hand, if you rent a house at say $700 a month, in five years it adds to just $42,000.
2. Work out the true cost of the mortgage
When buying a house, you are almost guaranteed that it will cost more than you think. But factoring all the possible costs allows you to get prepared psychologically and find ways of cutting the costs. The following are some costs that come with buying a property:
• Mortgage arrangement fee: expect to pay your lender some fees. In most cases, the fees are non-refundable even if the purchase is unsuccessful.
• Valuation fee: the property will have to be valued and you will cater for the fees. The cost varies depending on the price of the property. But you should budget for $400
• Legal fee
• Stamp duty
• Survey costs
• Relocation expenses
• Home repairs and improvements etc.
3. Go for a home you can afford
Mortgage experts advise you should go for a house that costs about two and half times your annual salary. Make use of the many free mortgage calculators available online to get a better picture on how your debts, income and expenses will affect how you live the rest of your life.
4. Can you afford the down payment?
The down payment is normally the greatest impediment to buying a home. In most cases, it is 20% of the sale price. Find out whether you can access the funds for down payment at a low interest rate.
5. Professional help can help
Ignorance can cost you big in the property market. Make use of professional help you can get so that your interests are well protected. Find ways of getting the help at a cost friendly price.
6. Mind the surroundings
Sometimes it is not all about the price of the house that matters. Mind the surrounding. These are the factors that will determine whether the house will appreciate in future or not. Remember, your equity won’t grow if your house doesn’t appreciate in value.