Buying a house is a major decision; many consider a milestone in their life. It’s definitely not a decision that can be made in a snap, as it is a major financial commitment that you need to be fully prepared to tackle. Because of this, there many things to be aware of before fully committing to a property that you’ve set your sights on.
When making a purchase as large as real estate, you need to be very careful of the terms you agree with. Going over the terms and agreement is a given, and making sure that you have all of the necessary paperwork is a requirement. Beyond this, there are even more things to keep in mind before signing your lease to avoid traps that will inevitably make your experience miserable.
So how do you make the right decision when buying a house? No tip will protect you from making mistakes, but here are a couple of reminders.
Don’t Be Fooled by Low-Interest Rates
One of the first things many buyers look at when purchasing a property is the interest rates. With a wide variety of mortgage plans being offered, it can be difficult to know which one to choose. One idea to keep in mind is whether you should choose a fixed rate or a floating rate. Floating rate, or variable rate, changes or fluctuates during the loan. They tend to be cheaper than fixed loans but at the cost of not being stable. Another thing to keep in mind is to always ask why an interest rate is low. Is it simply the best time to purchase a property, or there are hidden fees or downsides to your purchase. It helps to be skeptical as it will save you from a lot of pain and wasted money later on.
You Can’t Do It on Your Own
You might have the idea that you can and should do everything on your own. However, dealing with the red tape and inordinate amount of paperwork involved in securing a property can sometimes be too much to handle for laypeople like us. A good mortgage agent or broker can make your life more convenient as they normally have access to more lenders than you can ever find by yourself. They’re well versed in helping you find the best and lowest terms possible- it’s their job to secure the best deals after all. And yes, you do pay a fee, but this fee means that you won’t be saddled with all the extra work of researching the best rates, sorting our credit scores, balancing the fees since they’ll do it for you.
Be Loyal to Your Bank
You might be tempted to switch to banks that offer better rates, even if you’ve already spent years with a bank before. Don’t fall to this common trap, as bank loyalty does matter, especially when you’re in the hunt for better deals or faster applications. Many banks often try to offer better deals with existing customers as they already have their financial history and have the initiative to judge whether you’ll be a credible borrower or not. Sticking to a bank also ensures that you won’t have to juggle multiple accounts to pay your bills. Lastly, many banks put in the effort to cover most of your financial needs and probably have mortgage options readily available. It’s best to check with them to see if you can get better deals.
Stay Grounded and Realistic
It’s easy to look for the most idyllic place with all the fantasies and luxuries you want. The best view, a great-looking neighborhood, or promises of increased value in the future- many real estate companies offer these. But a wise buyer would take a step back and assess the situation by asking: what do I really need? Ultimately, the decision of where you’ll purchase your new home is left up to you. You might look for a good location, but a ‘good location’ is relative to what you need. Always compare properties with what you need at that moment: accessibility to public transportation, distance to your work or school, or even proximity to family members. These are all valid concerns that can only be answered by you.
The Best Time to Buy Is When You Are Ready
Many financial magazines and websites often say surprising claims like “The Best Time to Buy Property is Now” or “Buy Property Today.” While these are mostly done under good intention with the analysis of the market, if you are just out to look for property for you and your family, it’s best to take their word with a grain of salt. You should only buy when you’re ready and not because the market professionals say that real estate has been the cheapest in 50 years.