Buying a house is a big leap, but it takes lots of small steps to get there. Understanding each step, makes it easier to navigate the home buying process. Your homeownership experts at VMBS are here to demystify the process in our H.O.M.E. series.
1. Assess Your Finances If you need a mortgage to purchase your home, your lender will evaluate your income, expenses and the debt you already have to determine how much you can borrow. Use this time to ensure you have enough saved for a potential deposit and that your credit history is as tidy as possible, make sure current debts are paid on time.
2. Find Out What You Can Afford As a rule of thumb, your monthly mortgage payment should not exceed one third of your monthly income, and your total bills should not be more than 30% of your monthly income. Having completed Step 1, talk to a VMBS advisor or use our online mortgage calculator (http://vmbuildingsociety.vmbs.com/calculators_mortgage.php) to get an understanding of your current financial situation and what will be required of you with a mortgage. Make sure you don’t overextend yourself.
3. Where Do You Want To Live? Location is one of the biggest factors determining your property value over time, and your home equity relies not only on your home’s condition but also on how the other homes in your neighbourhood are taken care of and appreciate in value. Location also matters because your home is your life base, it needs to be located so that it’s safe and convenient for you to get to work, go shopping or to your kids’ activities.
4. Prioritize – Separate Needs From Wants Make a checklist. How many bedrooms, and bathrooms do you need? Do you want a kitchen island or perhaps a big backyard? List everything you want in your house and then number them in order of priority. This will give you clarity about what matters most. Bear in mind you may not get all you want, but this way you’re sure to get what you need.
5. Assemble Your Team You’re ready to begin your search, and there’s no need to go it alone. Ask friends and family who have already been through the process for recommendations. Talking with a professional real estate broker and a lawyer with expertise in the process, will help you develop a good strategy during the process. Choosing the right mortgage for you mostly comes from choosing the right mortgage partner. Hire people with comprehensive listings, industry longevity and expertise, like your teams at Victoria Mutual Property services, whose portfolio includes properties across the island and in Florida and Victoria Mutual Building Society with 135 years of experience.
6. Find Your Home Armed with your budget, checklist, and agent, it’s now time to look at properties! Take a friend along, as a second pair of eyes will see things you may miss. Make sure to bring your camera along, as photos will help you remember the details. Think about how each home will work for you, looking at the size of the rooms relative to your furniture. Consider also the age of the house as it might determine how soon you’ll have to make repairs.
7. Valuations and Inspections To make sure you’re making a smart choice, you mortgage provider will ask you to get a valuation done on the house. This will determine whether the house is worth the proposed price. When determining the value, things like the size, amenities and condition of the house, as well as the value of similar homes in the area will be considered. This step is important, as your lender will only approve a loan amount consistent with the value of the house. You should also hire your own inspector to assess the house for any problems that might not be obvious but could lead to costly repairs, such as termites or a leaky roof.
8. Sleep On It You’re about to make a big decision, so make sure to have a good night’s sleep and reassess in the morning. Make sure that you can check comfort, safety and access off your checklist.
9. Make an Offer Great, you’ve found the property for you! So now it’s time to make an offer, get advice from your real estate broker about a good initial offer, leaving yourself enough room to negotiate, but starting too low could turn off the seller. It may take a little back and forth, but once you reach a mutually accepted price, the seller’s agent will draw up the papers.
10. Closing We expect you’re now so excited, you’d like to move in tomorrow – don’t worry, you’re almost there. The closing or settlement process takes about 90 days after the offer is accepted. During this period, prepare to pay the closing costs which include registration fees, stamp duty, transfer taxes as well as agent and legal fees.
After you get through those 10 steps you can break out the welcome mat and the bubbly because the keys are yours. You’ve made a big step, but it will feel easier because you were informed about the process. And getting your mortgage from VMBS means you could get $150,000 cash back, which could come in very handy with all those new rooms you have to decorate!