Thinking to buy a new house?
It must be most exciting time for you and your family but before you start looking a house for your family here are some things you must consider…
- Are you Financially Ready?
Buying a home is one of the biggest purchase you will ever make. But before you buy make sure you are ready for it financially and mentally.
It’s not very hard to determine whether it’s a right time for you to buy a house or not. How you can examine your financial situation for home purchase, simply add up all your current monthly expenses (e.g. food, cloths, tuition, credit cards and current loan payments and all other bills…etc.) subtracts them from your monthly incomes, see how much you have left after paying all those monthly expenses. With that left-over amount, will you be able to afford your house payment and other related expenses, like insurance, heating, maintenance…etc.
- Do you have enough savings for Down-payment and other buying costs?
Down-payment is the amount of money that you pay upfront to purchase a home. This amount will be deducted from the purchase price of the property and mortgage loan will cover the remaining price of the home.
Minimum amount of the down-payment is depending on the purchase price of the house.
| PURCHASE PRICE | DOWN PAYMENT |
| $500,000 | 5% |
| $500,000 and $999,999 | 5% on first $500,000 and 10% on remaining amount |
| $1,000,000 or More | 20% |
BUT if you are a self-employee or your credit history is not so good, lenders may require you to put larger down payment.
All mortgages with less than 20% down payment are required default insurance. In the case, if your credit history is not good lenders will ask you to purchase insurance even your down payment is over 20%.
Meet with a mortgage broker and go over your financial situation to see if you can afford a house. Getting a pre-approval is always a good idea because it lets you know how much house you can afford, what interest rate and your monthly payments will be.
- What you and your Family need in the House?
Once you figure out your financial status and you are sure that you can afford the house, sit with you family and discuss what your need are? what kind house will be suitable for your family’s lifestyle. Detached house? Townhouse? Condo? Just keep in mind, consider your family’s both current and future needs.
Make a list, how many bedrooms and bathrooms you need in the house? Do you really need a garage? How many square feet? Are there any other special features you want in your house…etc.
- What Neighborhood or Location you like to live in?
Do you want to live close to certain schools, close to your work or look and views of certain area are more important to you? Make sure you pick the right house for you which can fulfill your family’s all needs. Discuss your needs and budget with your realtor and start the search for your dream home!
- Make an Offer and Close the Deal
Once you find the house you like, make an offer to seller to buy it. An offer to purchase is a legal contract, it should be done with caution because you can’t step out of it, if you change your mind after. Contracts have essential requirements including time, terms and impacts so make sure you fully understand all your obligations under the contract before signing it. Examine all the terms and conditions/clauses and their consequences with your realtor carefully before you sign it. Here are the key elements of the offer…
- Your proposed Price
- Amount of Deposit
- Financial details
- Time period till offer is Valid
- Closing Date
- Conditions (e.g. Home inspection, obtaining mortgage, title search…etc.)
- A list of Chattels (items in the house that you want to be included)
