Do you feel like you’re old enough to buy your first home? But do you also feel like you’re still not capable of running your own home? Thinking about buying your first home may seem like a responsibility, however, it will help you in preparing for your future. Don’t worry too much because these five tips will surely help you in preparing to purchase your first home.
- Start saving and practice good spending.
As early as possible, it’s important to practice good saving and spending habits. Saving up early will help your future self obtain a home loan easily. Upon good saving and spending, you should live on a strict, breathable budget. The more you save, the bigger the budget that you will have in purchasing your first home.
- Determine the amount you can afford.
Only go for the house you can truly afford. Do not buy the fanciest house only to end up not being able to pay for other expenses. Consider the most suitable house for your budget to save yourself from bankruptcy. As much as possible, choose a house with a payment of only 30% of your monthly income. Do not go over your budget to have a good liveable lifestyle.
- Ready your initial deposit.
With good savings and spending, it is easier to accumulate a deposit. Ensure to let your bank and lenders know that you are not a risky borrower by preparing the right amount for the initial deposit. In addition, try to secure a deposit that’s much more than the needed amount to help reduce your mortgage.
- Inspect your credit history.
You cannot easily get a home loan if you have problems with your credit history. Before purchasing your new home, inspect your credit history for possible issues such as an unpaid phone bill or impulse purchases. You can consider hiring services from a company that can inspect your credit history to help you know your credit history flaws and how to fix and lessen them. Make sure to have a good credit history but do not over inspect it because it might be a tip-off from your bank or lenders.
- Seek your broker.
Since your deposit and credit history have been taken care of, it is best to consult with your broker to discuss and organize a pre-approval to help you search for your first home.
By following these five tips, you will have a better understanding of preparing to purchase your first home.
BUY OR RENT?
You have two choices before owning a house, and it is to buy or to rent. A lot of people would prefer buying, but a certain amount of people would prefer renting because it is a safer choice.
Buy a property or find a property to rent?
This is one of the most commonly asked questions from first-time homeowners and below are the different advantages and disadvantages of buying or renting to help you enlighten your mind about the best option for yourself.
Advantages of Buying
- The value of the property you bought will likely increase in the future.
- A lot of good interest rates in their historical lows are waiting for you.
- When you have a place of your own, it can potentially put you in a good financial position in the future.
- You won’t have to worry about a landlord when you want to change a design from the property. Also, it wouldn’t be much of a problem when you damage anything because you can just have it fixed.
Disadvantages of Buying
- The neighborhood you like would most likely have high property prices, therefore forcing you to buy a property from a neighborhood you don’t really like because of your budget.
- There are a lot of other fees to pay, aside from the property itself, such as expenses for maintenance, bills, repairs, and interest rates. You also would have to set aside money for different causes, just in case you need it.
- Buying a home will require you to prepare for a big deposit. Acquiring such an amount of money will need a lot of time and effort. Also, you would have to be very mindful in spending your money.
Advantages of Renting
- Worrying about property rates will be off your mind. So, you can live wherever you like.
- You can move to different places whenever and how many times you want to.
- When a breakage of any sort occurs, you wouldn’t have to pay for it. Also, you wouldn’t have to worry about different maintenance fees and other property bills.
- You wouldn’t have to prepare for a huge deposit. So, you can rent as soon as possible.
Disadvantages of Renting
- The property isn’t yours but you’re paying a huge amount of money.
- You can’t be sure about your monthly rental payments.
- There’s a possibility that you end up with a not-so-great landlord who has terrible rules you need to follow and who makes a sudden increase in rent.
A lot of factors are to be considered when buying or renting a property. It is best to be knowledgeable about choosing the best option for you by thorough research and by consulting with a broker. Understanding and knowing what you can afford is necessary for you to be able to develop your saving and spending habits and to narrow down your options for the near future.
TIPS IN BUYING A CAR
Are you thinking about buying a car? Planning to buy a car or trading your old car for a new car might be exciting, but it is also kind of nerve-racking. Before purchasing that shiny new car, make sure to be knowledgeable about the different tips in buying a car to prevent yourself from making mistakes and regretful decisions. Try to set aside all the overwhelming emotions and properly prepare yourself for purchasing your new car.
- Research about cars.
Before buying, make sure to know which type of car is most suitable for you. You can look it up on the internet and a lot of different cars with different models and reviews will be available. Researching beforehand also makes it easier to compare different brands and prices. Also, it is important to know which cars fit your budget.
- Determine your trade-in worth.
Be knowledgeable about how much your trade-in car would sell to avoid selling it for a price that’s less than its worth. Do a thorough research of how much you can get if you were to sell the car privately. Make sure to be confident with your information when you go meet with your dealer.
- Construct and organize your car loan pre-approval.
Be mindful of your car loan and set up your pre-approval loan so that your bank or lender will know your current financial status and decide how much money they can lend you. Knowing how much money you can borrow from the bank will help you know your budget and the range of cars that you are willing to spend on.
- Research car deals.
Researching about cars before buying is not enough. You should do thorough research about different car deals so that you will be knowledgeable about which deals suit you best. Make sure to research several car dealerships to properly compare which deals are better.
- Say no to add-ons.
Car dealers will offer you different add-ons such as window tinting and paint protection. Disregarding these car add-ons will save you from spending more money. The car works just the same even without these fancy add-ons.
- Consult with a broker.
Having expert advice when planning to buy a car makes it so much easier. Consulting with a broker will help you find the best car deals. A broker will also be there with you throughout your pre-approvals. In addition, an expert can even do everything for you while keeping you updated.
Buying and choosing the best car is not easy. But with expert help, you will get the best advice regarding your financial situation and which car deals will be suitable for you.
Best Questions To Ask In An Open Home
When in an open home, don’t be afraid to ask questions. Your questions need to be answered to ensure if you like the property. However, make sure to ask the best questions to obtain the needed information in buying a house because it will help you in deciding which house to buy.
Let’s take a look at the 5 best questions to ask during an open home.
- Why is the property being put on sale?
With this question, you will know whether the owners are in a rush in selling the house or are they just waiting for a good offer to come. You will find out if the owners want a shorter or longer settlement period. It would also be a lot better if you get to meet their terms for the deals. Asking this question will help you during negotiations.
- Are there any latest sales to compare the property with?
Comparing the property with the latest sales will provide a price guide. This is important to know if the property is fairly priced or not. In addition, ask your real estate agent for the price ranges in the neighborhood.
- Are there any offers for the property at the moment?
This question will help you in figuring out the best offer you can give them. Your real estate agent can give you information regarding rough estimates about the recent offers and may also provide you the offers that were rejected. Also, try to ask about the grounds for rejection because it will show you the level of interest the property is receiving. In addition, asking this question could also reveal potential issues that this property holds.
- How long has the property been on sale?
The owners will most likely accept a low offer if the property has been on sale for a long time. If the property has indeed been on sale for quite some time, there is a possibility that the property has issues. It is important to research the property thoroughly to find out whether the property that’s been on sale for a long time is a good or a bad deal.
- Are there any issues with the property?
Before buying the house, make sure to ask if there are any issues with the house, even if you haven’t seen a single problem. Remember, your real estate agent knows better than you do about the property. So, don’t forget to ask this question because you might find out some issues that will affect your decision in buying the property.
Make sure that you consult with a mortgage broker to help you in making the best decision in choosing the best house.
What & How’s Of Credit Scores
As a child, you usually don’t pay for things with your own money. Instead, you ask for money from your parents or family, and they do the payment work for you. As an adult, you start to pay for your expenses with your own money or your credit. You start to make purchases, investments, loans, etc. And this is where credit scores come in.
Credit scores are given to you for banks and lenders to decide if you are a trustworthy borrower or not. This will help them understand your capacity to pay back for a loan that you are applying for. This will also help them in deciding how much money they will let you borrow and will also determine your possible interest rate and credit card limit.
Your credit score shows how good you are at managing your finances. Having a high credit score is beneficial because it is easier to apply for loans, rent an apartment, or lower your insurance rate.
When applying for a loan, make sure to have a good credit score. Let’s take a look at these 6 tips on improving your credit score.
- Always pay your bills on time.
Paying your bills on time will show your bank or lenders that you are responsible for managing your finances. Regularly pay all of your bills, including your utilities, rent, and phone bills. Being responsible enough to pay your bills on time will make you a reliable borrower.
- Make sure to pay your debts.
Paying your debts keeps your credit card balance low. Having a low credit card balance shows that you don’t max out on your credit cards and you manage your credit history well. Maintaining your credit card balance will have a positive effect on your credit score.
- Acquire extra credit from your phone bills and utilities.
You can get an extra credit score when you pay your bills on time. Some companies offer this service, and they will help increase your credit score.
- Do not disregard your unused credit cards.
As long as you are not paying for annual fees, try to keep your credit cards. Closing your unused credit cards will increase your credit utilization ratio which will not have a positive effect on your credit score.
- Only open new credit cards when needed.
Even if you have a high credit score, opening new credit cards when not needed will negatively affect your credit score. It will create hard inquiries in your credit score and will last for two years.
- Check your credit reports from time to time.
Your credit reports may have some issues and you will need to have them corrected as soon as possible. Having errors on your credit reports will affect your credit score negatively.
Do your best in maintaining a good credit score. Seek expert help in how you can always have a good credit score for a beneficial financial life.