Purchasing a home is a daunting task, especially for first-time buyers. The real- estate world can be confusing for people to choose a starting point when they are ready for research. Sometimes, you end up following house buying trends that result in taking on the responsibility of a home loan till your retirement.
Here are some tips for first-time homebuyers that can help you not end-up overpaying or buy you the home of your dreams:
1. Save for a Down Payment
Most people prefer taking a home loan for their first house purchase as it offers easy payment options. If you are also looking to opt for the same, consider saving for a down payment first. Many lenders may offer zero down payment options, but there are some hidden costs attached to them. For example, the total loan amount goes up considerably, and you might end up giving more than the required amount.
Therefore, saving for a down payment of the home loan is always the best option to choose as it avoids any additional costs.
2. Keep Your Debts to a Minimum
Owning a house comes with many financial responsibilities like maintaining the home and upkeeping, other costs. It is advisable to clear all debts before buying a house to save yourself from any burden. Also, you should consider building an emergency fund to accommodate miscellaneous costs. If you are not able to clear your debt by any chance, consider taking it to the lowest costs possible. It will also be beneficial if you are taking a home loan, wherein you can attract a lower rate of interest.
3. Determine Your House Budget
Determining your house budget is the most essential of all as it decides the costs you will have to bear in the future. While considering the budget and house hunting, it is imperative to keep your emotions in check not to regret the decision later or avoid overpaying.
4. Get a Preapproved Home Loan
Getting a preapproved home loan sets your budget straight for buying a house. For first-time buyers, it is essential to have a preapproved loan as it gives a clear idea of the financial investments you will have to make in the future. Also, it will help you determine the home loan amount and not let you go overboard your defined budget.
You can check your eligibility for preapproved home loan through renowned banks like Axis Bank.
5. Research Neighbourhoods
Everybody wants a comfortable living in a neighbourhood that has all the amenities available nearby. You can prepare a checklist of all essential amenities if you are a first-time homebuyer. It will help you get the best deals in the area of your choice.
6. Check Your Credit Score
A credit score is essential to determine any loan amount and your creditworthiness. If you have any outstanding payment like a credit card bill or previous loan amount, try paying them as much as you can. It will help you land better chances of lower interest rates and suitable tenure as per your requirements of a home loan.
7. Prepare for Closing Costs
For first-time home buyers, it is essential to be prepared for closing costs that include registration, insurance, taxes, and similar other fees. These costs are levied by the bank or lender while closing the deal for your new home. You should be prepared to bear the costs of such miscellaneous items, which can also become an essential factor in deciding the overall budget for your home.
8. Keep A Separate Budget for Move-In Costs
Once all the paperwork is finished for the home loan, and you have your keys to your newly bought home, the costs don’t stop here. When you move in, there are more costs involved, like furniture, appliances, and other fixtures. Any improvements you want to make in the house will cost extra. Therefore, keeping a fixed budget aside for such obvious expenses is vital, among others.