Financing a new home is always challenging. Once you are on the property ladder, after all, you have equity in your name. You can sell your home and buy another later on, after your property’s value has increased due to improvements made to your home and in your neighborhood. Real estate is considered one of the most stable investments for a reason, but getting on the property ladder is not a walk in the park. You need to save, purchase wisely, and make changes that will increase your property’s value in order to make a great investment.
Start by understanding your spending
The first step to financing anything is to first save for the down deposit cost. To save this amount, you will need to first understand where your money is going. Make a list of all your expenses and then separate these purchases into three main categories:
- Consistent Bills (i.e., rent)
- Variable Bills (i.e., food, electricity)
- Other Spending (i.e., clothing, dinners out)
Cut out unnecessary spending
Using the information, you have you can work out how much you can save per month, and how long it would take for you to reach your savings goal, i.e., your down deposit. Once you have the deposit (at least 10% of your home price), you can then go about finding a loan.
Get approved for a mortgage
Your loan will be dependent on your income, how good your credit score is, and how big your down payment is. Other factors include employment history and residence history. So, if you have been evicted for not being able to pay rent, this could negatively impact your credit approval rating. The more prepared you are before you apply, the easier your experience will be.
Buying under your budget
Once you have the down deposit saved and the loan pre-approved, it is time to find your dream house. When it comes to choosing properties, go by location and potential. Even if you can afford the best homes for sale in Laguna Niguel, for example, you are much better off buying a property that has potential but needs a little investment to make great.
How to finance furnishings and renovations
Once you have your home, you will likely want to make changes immediately. Though giving your home a fresh coat of paint to cover old marks or stains can be a great idea, it is always best to wait at least six months before undergoing anything more permanent. You need time to get the feel of the space and how you and your family use it.
Use this time to save up for the changes you want to make. Not only will this help you stay within your means, but it also will help you only choose the best of the best. Say you liked an antique clock for your hallway or living room. By waiting, saving up for one, and keeping an eye on the antique clocks for sale, you can be ready to buy the right one for your room, based on design, material, and dimensions.