More and more people are now getting into the trend to buy a house instead of just renting one. But buying a house is no walk at the park. It requires proper decision making, coupled with practical knowledge in real estate policies, real estate market value, the economic scenario, and even simple accounting.
The following is a list of some of the most practical things you should consider when you are set to buy your own house.
1. Your financial status
One’s finances is the most basic consideration when buying a house. Unless you have a huge savings in the bank for cash payment, you’ll have to assess if your salary can accommodate additional monthly amortization or else you would end up scrambling through additional loans and credits. Assess and manage your financial status because this will be the base criteria for all the other application (such as loan application) you will need to furnish later on.
2. Your credit report
Most home buyers apply for a loan to help them ease out the finances they will be using when buying a house. Loan companies require their applicants to present their credit reports. Also called FICO score, a credit report determines one’s capacity to pay as an applicant for a loan. If your FICO score is below 620, you may need to consider setting aside your plan to buy a house. Having a bad credit report is a disadvantage for a loan applicant because he/she will surely be getting an impractical interest rate in the whole track of the loan duration. If you still do not know your credit report, you can get it for free through online softwares.
3. The house you are eyeing for
Is the house you are dying to buy really worth your money? Some houses, especially the previously-owned ones, may be needing renovations and refurbishing in most areas. If you will be spending too much on these repairs, you may need to find a new prospect house. Still, you must allocate a fortune (say, 5% of the purchasing price of the house) to be used for maintenance of your new house.