From deciding which mortgage to get to finalizing the papers, getting a house loan can often be a daunting task. But today, we are here to help you with everything you need to know before and after buying a home and getting a mortgage. In our article, we will focus on the process for you who are going to buy an already existing house, but those who are going to build a new property can also benefit from this guide.
Consider the Property
Have you decided to buy a house, a condominium or a vacation home?
This is the first step; think about what you are looking for. What area, location, size, condition, standard and more do you want?
Do a Budget Estimate
Before you take out a mortgage, it’s important that you figure out how much money you’re spending on different things.
Make a traditional budget in which you indicate your monthly household income. Then do the same thing on the expense side. Remember to be honest with yourself and really include all the expenses you have.
Also remember to include costs you have that don’t show up every month. These can include vacation trips, dues, renovations, maintenance, newspaper subscriptions, etc. Spread these costs out over a year in your budget.
Now think about how much money will be spent on the running of your future property. In the housing advertisements of brokers, you can often see these costs under the heading “Operating costs” or similar. Find out what is included in this amount. Normally, there may be costs for electricity, heat, water/sewer and garbage collection. Sometimes it can also be insurance, sweeping and other costs. That said, find out what the normal operating costs are for the items you are interested in. Don’t forget about the costs you will have to incur to buy furniture, machinery and such for your new home.
The next step is to determine approximately how much you will have to pay in interest and repayments. You can calculate this yourself or by contacting a bank who will help you. Most home buyers find their items through, for example, The House and a broker. These often have features that allow you to do a calculation.
You now know how much money you are spending each month. You also know how much your item will cost you to operate and what you will pay in interest and repayments. Based on these numbers, you can then determine if you have the margins to buy the item you want or if you should choose cheaper items. You may even find that you can afford more expensive items
.By budgeting in this way, you will have more control over your finances and avoid feeling uncomfortable and insecure when buying your home.
When buying a house (does not apply to condominiums), keep in mind that legal registration fees and any mortgage deeds will be added.
The title deed is proof that you own the property. Mortgage deeds are proof that your property is mortgaged. If you are buying a used property, there may already be a mortgage deed covering all or part of the amount you intend to mortgage. Check with the broker or seller to see if the property has a mortgage and for how much.
Getting a Loan Commitment
Now that you know what margins you have, it’s time to ask for loan promises. Determine what you can imagine putting down on an item. That way, you won’t be drawn into bidding at too high a level. Come up with an amount based on the calculation you made earlier and stick to it.
Select at least five different banks and contact them by phone or through their Internet services. Once you have received promises of a loan, you can start going to the screenings and participating in the auctions. Remember that offers are not legally binding. Only when you sign a contract is the agreement binding on both parties.
These tips must be of great help when trying to get a house loan. Would you like to know more? Come back to check out the second part of our article. Until then, did you ever get another loan before? How did you proceed? Share everything with us in the comments below.