5 Key Considerations Before Buying a House
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While real estate can be a smart investment, selecting the wrong property could be detrimental to your finances. However, when chosen correctly, a property in an up-and-coming neighborhood could help to grow your wealth in the future.
If you are debating whether to purchase your own home, you will want to make the right decision for your lifestyle and finances. To avoid making a mistake, here are five considerations to make before buying a house.
The location you choose will not only determine your lifestyle at your new address, but it will impact the property’s prices and resale value. While you might want to invest in a home that is close to great schools, public transport and local stores, you must consider whether the property price will complement your finances and if it is in an upcoming area to receive a significant return on your investment.
The Mortgage Options
It is also imperative to select the correct mortgage for your finances. For example, you can choose from a fixed rate, variable rate, or standard variable rate mortgage. A fixed rate mortgage is a monthly repayment that will remain unchanged for a select number of years, while a variable rate mortgage will increase or decrease based on inflation.
You also need to decide whether to opt for a freehold or leasehold property. A freehold property will mean you will own a property outright with no landlord, while a leasehold property will provide you with a right to occupy a property for a fixed term. If the latter sounds like the right option for you, find out more online about leasehold conveyancing.
The Property Size
While a two-bedroom home might perfectly fit your needs at present, it might not be able to accommodate a growing family. If you plan on raising children as you grow older, it is wise to look for a property to suit your future needs. Otherwise, you might need to put your home back on the market a few years down the road to increase your living space.
The Down Payment
If you don’t have a minimum 20% down payment, the bank could view you as a financial risk, which can lead to a higher interest rate. So, if you want to pay less for your property over its lifetime, you would be smart to save for a large down payment.
While you might have heard good stories about a neighborhood, you must make an informed decision before making an offer and placing a down payment on a property. Take a walk around an area to identify how the streets and houses are looking. If the paving is filled with trash, the housing appears neglected, or you feel uneasy when walking down a street, it might be worthwhile finding a property in a better location. After all, the price of your home will be determined by the neighborhood’s aesthetics, median home prices, and crime rating.