So, you have decided to buy your first house, but you have no idea where to start. If this is the first time you are looking for houses, it’s understandable that you are not familiar with the process. But if you stop focusing on the unimportant things, you will understand that the entire process implies 5 main steps.
1. Get your credit reports
If you saved money to pay for the house you can skip this step, but if you intend to get a mortgage then you will need to obtain your credit score and report. Keep in mind that your credit score and credit report are not the same thing.
Your credit report shows a detailed situation on your credit history, like your credit balance, payment history, loan history and accounts opened and closed.
Your credit score is a number that lets your lenders and renters know if it’s safe to collaborate with you.
2. How much can you afford to pay for a house
Some may say that it’s difficult to understand how much you can afford to pay for a house, but you can easily determine the sum if you are using the 28/36 rule.
You should not spend more than 28% of your gross monthly income on your household expenses. And your household debt should not exceed 36% of your monthly income.
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3. Get in touch with a real estate agent
The real estate agent will help you find a house that fits your budget and meets your requirements. Make sure you are hiring a reputable real estate because they will be able to connect you with the right seller.
If your friends cannot recommend you someone, you can contact a local real estate agency, they will put you in contact with an expert.
4. Find a mortgage broker
Find a lender that will offer you a mortgage to buy your house. Make sure that the broker offers you solid rates and low closing costs. If you do not know how to find a mortgage broker Melbourne
, you should contact a corporation that is specialised in negotiating and packaging residential loans for their clients. They will find a package that suits your needs and will offer you guidance during the process.
5. Make an offer for the house
The moment you identify a house you would like to buy, you should make an offer. Do not throw out a number before finding out what the property is actually worth. You can ask a property inspector to go through the house and examine it to see if it has structural damages, and flaws, and how much the repairs would cost.
Your lender can make a home appraisal. The lender will check different factors, like the number of rooms, if it has a pool, how large it is, and similar other aspects and will give you a good idea on what the fair price is.