Buying a new house is not the same as buying a pair of shoes. First, the cost is exponentially increased. You cannot buy a house on a whim as you can buy shoes. A whole lot of budgeting has to be done.
Secondly, if you decide you do not like the shoes anymore, you can give them away without feeling the pinch, or, if they are still brand new and you have proof of purchase, you can return them to the store if you discover a defect and get a new pair. Obviously none of these options is available to you once you have bought your house.
A house is a life-long investment. For most people, it becomes a home where memories are made and children are brought up. It is a safe haven and a place where you are always welcome (if you are a member of the family that is). Seeing that it is so important, it is absolutely crucial that you get it right when buying your new house. Follow these tips and you are likely to avoid the common pitfalls that most new homeowners face.
Unless you have been saving up for years or are filthy rich, you will probably need a home loan to be able to buy a new house. This is a perfectly viable option, but you need to do your research thoroughly to avoid disappointments.
Default in payments of some home loans might lead to the repossession of your house, and you wind up losing everything. If you do not have enough money to make a significant down payment towards the house, the lending company might require you to take out mortgage insurance to make sure they can recover their money if you fail to repay.
Have all these considerations in mind as you decide on your method of financing. There are many mortgaging companies offering home buying loans. Weigh their pros and cons and make the wisest decision.
2. Make a shopping list
Just as you would when going to buy groceries, you will need to come up with a shopping list of what you want for your house. Do you need a large space for the family? Alternatively, will you spend most of your time away and just need a comfortable place to relax at times? Do you want a mansion or an apartment?
These are things that you will need to determine in your mind before you embark on your journey to owning your new house. Knowing what you want will help you to compare prices and come up with a budget that you are comfortable with and which can get you comfortable accommodation.
Another thing you will need to determine, perhaps as part of the shopping list or as something separate is your location preference. A number of factors determine this.
First of all you will want a place that is convenient in that you will be able to access your place of work or school or wherever it is that you spend your days easily. Convenience can also be gauged on how easily you can access utilities such as the grocery store or hospital from where you are.
You will also want a place that is secure, where you can sleep soundly at night without fear of violence and crime. Some people also look to move in to their neighborhoods where their friends or families are, making it another determining factor.
The location you settle for will also have an effect on the value of the house you will buy so keep that in mind as you make your budget.
4. Be ready to adjust
You might be required to adjust your expectations to fit into your budget. One of the worst mistakes that a buyer can make while buying a home is to overspend, so you might be required to adjust what you want.
If you must get a house in a particular neighborhood, then your budget might dictate that you choose a smaller one. If you must have a big house on the other hand then you might be required to change your location preference. Be ready for such occurrences and act appropriately but whatever you do, do not overshoot your budget.
Brian Taylor is a consultant with Stella Settlement agents, a Perth based real estate settlement company. He contributes articles and blog posts on many real estate and home improvement blogs and enjoys networking with bloggers.