They say it takes 10-years to climb the home ladder and get your own four walls, but there is a lot more to buying a home than just owning a small plot of land.
There are numerous responsibilities associated with being a homeowner. It’s certainly a big commitment in your life that you have to analyze carefully before signing the final documents.
You have to take numerous things into account while choosing and buying a home, that’s why we’d recommend for you to find an agency to help you with such matters. Websites such as https://www.thepattisallgroup.com/ will also allow you to explore the world of real estate, with all the latest insights into the market, which will allow you to rest easy, knowing you got the best deal!
Mortgage
Owning a home can come with a hefty price tag; that’s why around 63% of American households have a mortgage on their home. This number has decreased from its 2008 peak (and crash), where nearly 69% of US citizens had a mortgage attached to their name. An aging population, tighter credit, and more cash sales have resulted in fewer mortgages. However, you might not have the cash to purchase a house upfront, so if you’re able to obtain a mortgage, it can certainly help you finance your dream.
Before even considering going to the bank and asking for a mortgage, you have to have set aside at least 10% of the home’s initial price. This is only a ballpark figure, as in times of COVID-19, some lenders might be less willing to risk their money, thus requiring as much as 15%-20% of the home’s worth as an initial payment.
You will also have to provide various documentation showing your income, job stability, and spending habits. Many different aspects come together in deciding whether a bank can grant you a mortgage, from paying off a car to having children. Either way, make sure to have a stable job and to not change careers before applying for a mortgage, as you’ll need at least three months of paychecks from one position to show you’re qualified to get a loan.
Investment
Even though the market has a steady tendency to go up, you have to remember that owning a home is not a guaranteed good investment. It can be a pretty secure investment compared to investing in stocks or bonds, but if your main goal of purchasing a home is to make a profit out of it, you should reconsider.
Even though real estate prices tend to rise, at least historically speaking, you should remember that this can take a few years to happen; or even decades. The current average appreciation rate of a property is 3.8% in the US per year, but you should remember that this is an average measure. Before making the purchase, educate yourself on the local appreciation rates of properties in the nearby area. Some sites will have a higher appreciation rate than others and therefore are a better investment from the economic point of view in the long run.
Investing your money into property can also be a great form of protecting yourself against inflation. Plenty of elderly tell stories about purchasing their home back in the 50s and only paying a couple of thousand for it!
Well, this might have been the case a few decades ago.
Today, a few thousand dollars might secure you a square foot in the most desired areas, but a few decades ago, it could get you a townhouse. This results from inflation (which is, simply speaking, the fall in the purchasing value of money) combined with the market’s growth over the years.
Choosing The Right Home
Going for home viewings can initially seem very exciting, but when you start thinking about everything you need to analyze, it can become very overwhelming, very fast.
Make sure you work with a professional agent while on the market for buying a home; they will be able to make sure that you’re getting the best deal and that there aren’t any hidden surprises you’ll be faced with once you already sign the contract.
In addition to that, always make sure that you hire your own agent and not work solely with an agent representing the seller in the same transaction. This is extremely important, as double-ending deals can make you pay for the property much more than you would with your own agent.
There are numerous ways to buy a home, either through a private deal or an auction. From a real estate agent to only by using a lawyer to draft an agreement. However, we recommend hiring a professional who will go with you to view your chosen house before signing any contracts.
Many of them specialize in viewing homes and can find features that might warrant a costly repair.
Conclusion
When buying a home, there are many aspects to consider, from the address to the mortgage you’d be able to obtain. It’s essential to rely on individuals with professional qualifications when buying a property, as they’ll minimize the risk of you buying a home that is not suited for you or unmortgageable.
Buying a home can be an excellent investment, but it can quickly turn into an unnecessary if not done right.
Always ensure that the neighbourhood you have chosen is the one you see yourself in for the foreseeable future.
Moving can be costly and troublesome, not to mention the fact that you’ll get stuck with having to pay off a mortgage on a home you don’t even want to live in!
