Buying a home is exciting, but the stress of dealing with paperwork, inspections, and negotiations can be overwhelming. However, there are ways to mitigate the stress and make your home buying experience smooth.
Tackle the following tasks before you get your home loan and you’ll have an easier time buying the home that’s right for you.
1. Calculate your potential home loan repayments before applying
Before you apply for a home loan, calculate your monthly loan repayments along with the date you’ll expect to complete your payment obligations. Don’t do the math in your head – use this handy home loan calculator from loans.com.au to get accurate calculations.
While you can’t know the exact amount you’ll be approved for until you at least apply for a home loan, you can estimate the amount of your loan to calculate your monthly repayments.
2. Check school reputations in different areas
If you have kids of any age in school, check school reputations in all the areas where you’re considering buying a home. This applies to community colleges, too.
Your home loan has nothing to do with school reputations, but here’s the potential dilemma. Say you’re counting on living in a certain area and you already have your loan approval. What will you do if you suddenly realize the school your home is zoned for is less than ideal?
If you’re like most parents, you’ll look for another house to buy in a neighborhood with better schools. That makes sense, but what if you need a bigger loan to buy a home in that area? Now you’ll need to go through the loan approval process all over again.
Check out school reputations before you apply for a home loan so you can be certain the area is right for you.
3. Test drive your preferred neighborhood
You should always take a drive through the neighborhood before you buy a house, but it’s also good practice to drive through neighborhoods before taking out a loan. The reason is the same for why you should check out the schools before taking out a loan – you might not like the neighborhood and you could end up needing a bigger loan.
The folks at realtor.com recommend not just driving by, but spending time in the neighborhood by booking an Airbnb close to the home you’re considering buying. This way, you’ll get a feel for what the neighborhood is like at night.
You won’t get a feel for every detail, but spending a few nights in the area will tell you if there are random train horns or car alarms going off all night on a regular basis.
4. Connect with a real estate agent who is also a lawyer
There are pros and cons to hiring a real estate lawyer when buying a house, but the benefits outweigh the drawbacks in many situations. The most obvious reason is that you’ll have someone on your side who has made a career out of understanding complex real estate laws.
The home buying process can get complex and you want someone on your side who can answer legal questions that arise. For example, you might encounter a problem during closing like liens on the property or a tenant who won’t move out. Standard real estate agents aren’t qualified to make judgment calls regarding legal issues.
You could hire a lawyer as needed, but it will cost you more money that way. Hiring a real estate attorney from the start bypasses the potential for extra expenses and hangups.
5. Stick to a strict long-term budget
The best time to develop the habit of paying your home loan on time is before you apply for the loan. Before you even think about applying for a loan, get your financial house in order. Create a strict budget that accounts for your loan payments for at least a year and start living as if you’ve got loan payments.
Stash your loan payments in a separate savings account and fine-tune your budget to make it work for you and your family. The sooner you do this, the easier it will be for you to make your loan payments because it will already be a habit by the time you’re approved.
Preparation is critical
Preparing to apply for a home loan is just as important as preparing to move into your new home. Preparing now will make life easier during the actual home buying process.