It’s no secret: house shopping can be both a terrifying and exciting ordeal.
Everyone who has dreamed, planned, and worked hard to own their home is likely to feel a sense of anxiety when they finally take out a loan.
This is completely normal as it’s a major milestone in your life.
Whether it’s your first time purchasing a home or not, implement these strategies below to take the stress out of getting a home loan.
1) Prepare A Priority List of Considerations
What are the most important issues to you when it comes to your next home?
Is location firmly at the top of your list, or would you rather have a larger yard for the kids to play in or be close enough to work?
Are you planning to stay in your new house for a few years or for good?
Everyone has a different list of needs and wants when buying a new home. Given this situation, it’s best to rank your priorities ahead of time so you don’t get sidetracked.
According to the U.S. Department of Health and Human Services, planning ahead is one of the best ways to reduce and manage stress.
So, set aside an hour or two and discuss with relevant parties what are your future home’s must-haves. This will help you to focus on the features that matter to your family rather than get caught up in details that really aren’t that crucial.
2) Plan Ahead with a Home Loan Calculator
Perhaps you want to know where your money is going every month, so you don’t have to worry about making repayments.
A home loan calculator will be able to help you with this.
Just input the details of your monthly repayment plan and it’ll show you how much interest you’ll accumulate over time as well as your total repayment amount.
With a home loan offset calculator, you can instantly see how much interest you’ll be paying over the years. This enables you to hypothesize decisions and make adjustments to your repayment plan if needed. To check out an offset calculator, click here.
3) Understand Your Repayment Plan
Do you know how a home loan works? Are you clear on what type of repayment plan you can choose from?
Considering that your main source of income is going towards repaying the home loan, you need to understand the nitty-gritty before signing your name into contracts.
As long as you know what’s coming, it’ll alleviate any unwelcome surprises.
Fortunately, there are professionals such as real estate agents, financial advisors and lawyers who are more than happy to guide you throughout the process.
4) Consider Your Financial Situation
As more people are living with their parents or comfortably in rentals, some would argue that buying a home is not ideal in the current climate.
While this may be true for some, it’s important to think of your unique financial situation and future goals.
For example, if you live in an expensive city with a small salary, planning to buy a home right away might not be the most realistic plan of action.
If you’ve received a job offer in a major city that has career security and a fantastic salary, you may want to consider the move.
Thus, it’s important to think carefully about how much money you can put—both in downpayment and repayment form—towards buying a house.
5) Contact Your Bank
Get in contact with your bank to ensure you’re actually eligible for a home loan.
They’ll often check your credit history to determine if you’re financially fit enough to pay back the loan that you’re asking for.
If you feel that you aren’t in a stable position for a solid repayment plan yet, pad up your finances a bit more and find ways to increase your income.
You may also opt for a longer repayment tenure if you can’t handle large monthly expenditures at this time.
6) Shop Around for the Best Loan Rates
Don’t feel too tied down to the bank that you’ve used over the years.
With the Internet, cross-checking loan prices in your area is made so much easier.
Check rates with other loan providers and compare interest rates as well as down payments and service charges.
You might be surprised at the options available that don’t involve huge fees or charges, especially if you’re looking for a lower rate.
Moreover, ask about any legal entanglements you might have to sign up for if you choose a particular provider.
7) Conduct Research on the Location
If you’re moving within the city of your old home, you may already be familiar with the customs and amenities of the area.
If you’re planning a big move, however, it’ll be incredibly useful to do some further digging.
Search for information on schools that your kids may attend or any traffic issues you might face, from commute time at work to daily errands.
Moreover, don’t forget to find out about hospitals and other important services nearby as well.
This way, you can feel confident that your future home is in an area you know you’ll feel comfortable in.
Most importantly, you’ll also feel that the giant home loan you plan to take out will lead to a major life milestone that’s worth the fuss.
8) Rely on Relationships
Do you know a friend who’s a real estate agent? Do you have connections with someone who can help you find the best house for your needs?
This is where your connections can come in handy. If you have a close friend who has gone through this experience, especially a local to the area, consider giving them a quick call or an invitation over coffee to discuss the ins and outs of acquiring a home loan.
More often than not, your friend will be happy to assist you in your house hunting journey.
However, if you manage to snag a professional connection, it’s also worthwhile to compensate them for their troubles.
Having someone to fall back on can be a great stress reliever as it ensures that you aren’t going through the journey alone.
Founder Dinis Guarda
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