Buying a house is a milestone no matter your age or economic status. It’s also a solid investment, as its value will not depreciate over time. At the same time, a house is a big commitment. Buying one is a decision one has to think through carefully.
There is a wide variety of factors at play when purchasing a house. Take note of the following things you will have to think about before signing that Deed of Sale. Keep these in mind before accepting an offer from quick money lenders in Singapore.
1.Consider your current and future status
Before making the leap, identify your purpose for the purchase. If you are single, are you planning on staying as such or settling down? If you are married, are you planning on having kids? These will determine important aspects such as the size of the house, the establishments surrounding the house, the type of materials you will use for the house and the distance of your location from the city center and other establishments.
If you plan to have kids, having a house near a school would help. If you are working, you can avoid traffic if your house is near your place of work or at the very least, near the train station.
2.Identify your financial situation
Once you have an idea of what kind of house you want and need, it’s time to assess how much your financial situation.
Do you have an emergency fund you can use for your daily needs in case you suddenly lose your job? How will you pay for the house if you lose your job? Do you need to create another income stream to make sure you can always pay for the amortization of your house? Answering these questions truthfully will help determine the price of the house you should buy – or if you should buy one in the first place.
3.Research for houses you can afford including payment terms and conditions
Buying a house is not just about looking at designs and aesthetics that fit your style. If you are like most people who will not be able to afford paying for the house in full, you will have to negotiate with the seller. You can ask upfront if they allow bank financing. This means applying for a home loan with a bank or other financial institutions, with the house will serve as a collateral.
4.List down your financial options for the purchase
The ideal option would be to pay for your house in full. But if you do not have enough money yet, you will have to apply for a loan. As discussed in the previous item, a home loan usually means your house will serve as a collateral. You will enter into a mortgage agreement with the lender. Since the loan amount for these types of loans are usually significant, lenders require a collateral as a security. In short, if you fail to pay the loan, you could lose ownership of the house.
If you do not want to take that risk, you can still purchase the house by applying for a personal loan. However, you will have to look for a lender who will allow for a personal loan for the purpose of purchase of a house. Since personal loans are often lower in amount than home loans, your savings should be able to cover some of the purchase price.
Having a list of available financial options will help you evaluate the best one that fits your current situation. You will be able to see the pros and cons and save yourself from bad decisions.
5.Research on housing loan and mortgage rates
If you’re still strongly considering buying a house at this point, make a list of banks and financial institutions that offer housing loans. Remember, housing loans are not created equal; lenders often offer different interest rates. Also, keep in mind that your credit score and financial history can affect interest rates, for better or worse.
Having said all that, look for one with the lowest interest rate. Compare home loan packages including payment terms and penalties.
6.Do your due diligence on the house you are planning to buy
Take time to investigate and do a background check. Ensure that the seller is really the registered owner of the house. Ask to see the property title. It should reflect the correct address, property measurements and name of the owner.
Examine the title thoroughly and be wary of annotations present on the title as these may indicate that there are other persons who have interest on the house. Ideally, the property title should be clear of annotations on mortgage or encumbrances.
7.Plan out the next five years
If you applied for a loan and had to mortgage your house, make a clear plan of how the next five years will look like while you are paying for the house. You will likely need to cut back on other personal wants and goals. If you travel regularly during the year, you might need to cut back on this expense. If you eat out a lot, having a mortgage might mean you need to cook more meals at home.
It is also best to prepare a contingency plan. In case you are not able to pay regularly or you miss out on a payment, what will be your next step? It’s better to confront these possibilities as early as now while you are still in a happy state.
A house is a long-term commitment. This is where you will come home to. And if you will have a family, it will be where you will raise your kids. Hence, the decision should be well-thought of. Also, if you’re not going to pay for it in full, the mortgage is going to be just as much of a long-term commitment as the house itself, as you will be paying for several years. It could be as long as 20 years – a debt that you will need to pay for a good part of your adult life!
Are you ready to take on such a personal and financial responsibilty? If the answer is still yes, then go get that home you deserve.