People fear what they do not understand. A good example is the purchase of a home. The average consumer knows very little regarding the home buying process. Between finding the right house, making sure it won’t fall apart the day after it is purchased, and finding the best financing, it is no wonder that so many people are afraid to purchase homes. Buying a home is one of the most important financial decisions an individual will make. For a first-time home buyer, the decision to purchase a home can be daunting. It will represent a major step forward as the individual/family will be assuming potentially its largest responsibility. As with any major decision, it is important that everyone, especially first-time home buyers, take full advantage of the information and training that is available to more clearly understand the home buying process.
To prepare, you should do research and be fully informed before beginning the search for a dream home. Here are five steps to get started:
Before you start your house search, think carefully about what it will be like to be a homeowner. For most people, home ownership is an integral part of South African lives. That is not even to mention that the advantages (tax benefits, pride of home ownership, financial investment) far outweigh any drawbacks.
Your credit history is one of the first things a lender will look at in making a decision on your loan. Contact one of the three major credit-reporting agencies to obtain a credit report. Review it carefully to be sure all the information is correct. If you find discrepancies, you should work with the credit agencies to resolve them.
Saving for a deposit can be one of the biggest barriers to home ownership. Mortgage lenders recognise this dilemma and many now offer no-deposit loans. In addition to this they are also offering 105% home loans to pay for transfer and registration fees. So you can buy a house without needing any money for a deposit and transfers etc.
Before you begin working with an Estate Agent, first go to your local bank and ask them to pre-qualify you for a mortgage. Most will provide this service free of charge. Pre-qualification will let you know exactly how much you can spend on a home purchase BEFORE you start your search. A pre-qualification also makes you a more attractive buyer when you are ready to make an offer on a home. Home sellers are more likely to accept an offer from a buyer who can demonstrate the ability to secure financing.
Many financial institutions offer home buyer education classes to prepare you for home ownership. Classes normally run about four hours and cover the basics of home buying. Some of the topics covered are how to apply for a loan, work with an Estate Agent, make an offer on a home, and the responsibilities of home ownership.
More people who are renting property now could qualify to become a homeowner. Do not let fear or ignorance stand in your way.
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