Some Things to Note Before Deciding to Buy a House
Owning your own home is everyone’s dream. As part of the basic needs in life, Home is very important to have. Not only as a place to live, but the House is also expected as a source of tranquility. A place where we pour out affection with family members and complement each other.
Buying a Home is one of the biggest investments and important decisions that happen in life. And from year to year the price always goes up, this makes the decision to buy a House today is also a wise decision. If it continues to be delayed, the price may no longer be reachable.
We will easily find a nice house, the location is strategic but the price is very expensive so we can not afford to have. For that, buying a House takes time. We can’t rush and have to consider a lot of things. If that’s not possible, we should focus on improving our financial condition.
Before buying a House, here are some things to know.
1. What is your financial condition?
Before deciding to own your dream home, conduct a serious audit of the financial condition. Because we have to be prepared to make purchases and expenses for the house. Then we have to make sure that the financial condition is ready to take this big step. And if that’s not possible, we need to do more time to prepare for it.
Look at the savings you have.
Never consider buying a house before you have an emergency savings account with a three to six month living expenses. Because when buying a house, there will be considerable costs including down payments and installments. We need money set aside not only for those costs but also for emergency funds.
We need to know exactly how much we spend each month and where it goes. This calculation will tell you how much can be allocated for mortgage payments. Be sure to take everything into account so that we have a clear picture.
Generally, in order to qualify for a home loan, we need a good credit, a history of timely bill payments, and a maximum debt-to-income ratio (DTI) of 43%. Today’s lenders generally prefer to limit housing costs (principal, interest, taxes, and homeowner insurance) to about 30% of a borrower’s monthly gross income, although this figure can vary greatly depending on the local real estate market.
To make it easier to calculate this, use a calculator from mortgagecalculators.info a personal finance website with long experience since 2008. This site provides the best user experience and also fast. There is a large list of financial calculators that we can use, such as:
Monthly Payment Calculator
– View estimated monthly payments with the calculator and look for more in-depth payment estimates.
Minimum Income Requirement Calculator
– Want to own your dream home? Use this to calculate the minimum income required to buy it.
Home Loan Limit Calculator
– Want to know about how many home loans we can afford? Use this free calculator.
– View current debt-to-income ratios.
2. Which type of house best suits your needs?
We certainly have a number of options when we want to buy a residential property: Whether you want a Tapak House, a Flat, a Townhouse, or an Apartment. Each option has its pros and cons, depending on the purpose of home ownership it wants to achieve.
We can save on purchase prices in any category by choosing a home that needs renovation or fixer-upper. But we have to pay attention to things like working time, working capital, and the money needed to turn the fixer-upper into a dream home. Whether it’s worth it or not.
3. What specific features do you want from an ideal home?
Although it is good to maintain some flexibility in this list. But still we should be able to get a home purchase that suits your needs and desires. Some basic things such as strategic location and environment, to smaller details such as bathroom and kitchen layout to home design are some important points to note.
4. How many mortgages are eligible for you?
Before deciding to buy a House, it is important to know how much the lender will give us to buy that first home. We may think we can afford a house for Rp 500 Million, but lenders may think you can afford to buy only Rp 300 Million. Based on factors such as how much other debt you have, monthly income, and how long you work.
Be sure to get initial approval for the loan before submitting an offer for the home: In most cases, the seller will not even receive an offer that is not accompanied by the initial approval of the mortgage. To that end, it’s helpful to look at lenders, compare interest rates and fees using tools like mortgage calculators in mortgagecalculators.info.
5. How much installments can I pay?
Sometimes banks will lend more fees than they actually need. Just because the bank says it will lend Rp 500 million doesn’t mean you really have to borrow that much. Don’t make this mistake that makes the financial condition falter. Little is left after they make monthly mortgage payments until they can’t meet the cost of other needs.
In deciding how much loan to take, not just the monthly payment. But consider how high property taxes in selected neighborhoods are, how much homeowner insurance costs, how much you can anticipate spending on maintaining or repairing a home, and how much the overall cost will be.
It is not impossible to own your own dream home, all we need to do is keep trying and improve the financial condition. Do the tips above and start organizing a better future. Buying a house is a good decision, its ever-increasing value makes it a profitable investment.