Buying a property is a very significant investment. While many consider it as part of their legacy, pouring in almost all of their savings on the purchase of the so-called ideal home, owning a real estate property can turn out to be a profitable business for some. Whether you are going to buy a house for your own personal needs or for you to aesthetically improve for later resale, there are some things that you really need to review even before buying that property.
Review your Need for Buying
One of the most often overlooked aspects of purchasing a property is giving the thought enough time. Buying a house is a considerable investment. Sometimes you will even have to make the necessary changes to your living arrangements just to accommodate monthly mortgage payments as well as other recurring expenses. You need to reflect on what you really need and the reasons why purchasing your own home should be done now. You need to be able to tell yourself that this is for the benefit of everyone both in the present and in the future. If you have doubts about making this life-changing purchase, it is best to postpone it until such time that you are more determined to pursue the purchase.
Review your Financial Standing
To help you decide, you can start reviewing your financial records. If you own a business, will you be using the revenue generated from the business to finance your property purchase? If you are an employee, will your monthly remuneration be able to cover both your day-to-day expenses and the mortgage on your property? Do you have additional means of income generation for those emergency repairs that come with owning a real estate property? Many real estate property experts will tell you to buy a property which is significantly lower-priced than what you think you can afford. For example, if your budget is 200 thousand dollars, then you need to search for a property that is lesser than this amount, say 150 to 180 thousand dollars. Some experts would recommend adhering to a 30 percent rule on your mortgage. This means that your mortgage should not be more than 30 percent of your income on a gross monthly basis. For example, if you are receiving 3,000 USD per month, the mortgage you can afford should not be higher than 300 USD per month. It is often best to seek the advice of a financial planner or even an accountant to help you review your financial standing.
Review Current Market Forces
You also need to consider market forces. You need to take into consideration market forces that can significantly impact your ability to purchase a property. Increased demand for homes that are in limited supply can significantly drive property costs. Additionally, all inherent activities in the purchase and ownership of a property can also increase. Mortgage interest rates, for example, are now at the 4+ percent level, up from 3.15 percent in October 2015. While numerically this would seem insignificant, try computing this in terms of thousands of dollars and you will see the enormous difference.
Review the Property’s History
It is imperative that the property you are going to purchase is free from liens. There must also be no problems as to its ownership. You don’t want to purchase a property only to be entangled in a legal battle in the future. It is always best to seek the services of a real estate lawyer to help you run a records check on a certain property.
Review your Payment Options
Closely related to reviewing your financial standing, getting well acquainted with your payment options should give you a head-start in purchasing a home. Different banks and other financing institutions can offer a wide variety of payment options spread in a few years up to 30 years. Reviewing these five things is a must for any property buyer. Your house is an investment. You might as well make the correct choice.