Marikor Hidalgo asked: If there’s something you should never gamble your chances on, it’s the prospect of buying a house. It’s so easy to go rushing off in search of dream houses you would like to buy, set your heart on a select few, and then end up crossing them out of your list, simply because you can’t afford them. In contrast, it’s even easier not to take a chance at all in your lifetime and to keep putting off your plans until you have the cash. Because being a first-time home buyer cannot be left to chance, you have to take calculated risks with properties and people that will work in your best interest. Here are some facts for first-time home buyers on calculating the risks.
Calculating the costsIt’s as simple as getting hold of pen, paper, and calculator to make some computations. For your dream to start becoming a reality, you first have to express them in numbers, and real ones at that. Write down and itemize your regular expenses, particularly on a monthly basis. Include those utilities and bills which keep your household running, along with forthcoming expenses which you are anticipating. Compute how much income you make every month, as a single earner or combined with your spouse. Add any other sources of steady funds which come into the household with regularity.
What to expectExpect an estimated two-thirds of your total gross income to be allotted for all expenses and taxes. The remaining one-third is more or less what you can set aside as a monthly payment for the mortgage you will eventually take on. While you’re at it, estimate a target amount which you are prepared to borrow for the next 15 to 30 years ahead.
In line with this, it would help if you made some adjustments in your monthly budget. For instance, this could mean cutting down on fuel and minimizing credit card expenses, just so you can start saving some extra. The idea of owning your own home should be quite a motivation. Taking on a mortgage means simplifying your life in certain aspects without sacrificing your quality of life and the basic needs of the family.
The chances only get betterChances are you’ll be applying next for a mortgage loan. The risks you take become more calculated when you take time to shop around for loan offers, avail of free consultations on pre-approvals, and do other related research online.
As a first-time home buyer, you’ll have offers for several loan options with banks and private lenders with whom you have a good credit standing. Once you pre-qualify for a loan, at least you’ll know how much you can borrow. But once you do get pre-approved for a mortgage, you’re sure that money will be lent. This increases your bargaining power and your confidence in negotiating with sellers and real estate agents.
Speaking of real estate agents, you increase your chances of finding a great home when you consult a reputable one. You also decrease your chances of wasting too much time and effort sourcing out useless and risky prospects on your own. Minus the unnecessary risks, you’re bound to succeed with a real estate expert on your side. Buying and selling homes and coordinating mortgages are, after all, a real estate agent’s specialty.
Amanda
