Here are some Practical Ideas to buy Your Dream House
The process of finding that first house and arranging for finance is one of the most complicated tasks in life. Especially when finances are limited, the market is pricey and there's so much choice. Following tips will help you find your dream home.
- Start saving for down payments before you start shopping for a home - The greater the down payment, the cheaper will be financing. Go for more down payments. E.g. 25%of down payment will be a good amount.
- First Buy a small house with a lower mortgage- Buy a small house with lower mortgage as that will help you sleep well at night. Your first house probably won't be your dream house, but it can be a good place to start working towards it.
- Needs extra money for other home expenses (5% of the house cost) - Home ownership comes with a whole new category of expenses. For following types of expenses try to have extra amount when you buy house i.e. about 5% of the house cost(includes--home insurance,new deck, Planter on the balcony,new roof if you buy old house and Paint of your)choice
- Number crunching- Crunch the numbers yourself before shopping for financing - Banks and other lenders have formulas to determine how much you can afford to borrow. But they don't tell the whole story. Things like child care, which can be a huge expense for young parents, are not always factored into the budget unless you specifically mention them.
- First find finances for your house than think about house - Know in detail about the cost of money, and how much that mortgage is really going to add to your bottom line each month.
- Ready for worst cast scenario for higher Interest rates - Imagine the worst cast scenario for the next five years (e.g. think about 2% increases) and build your financial plan around that number. If things turn out better, you'll be ahead of the game.
- Government help-Some time you can use your regestred saving to buy a house. (RRSP in Canada)
- Locations Is important for Resale Value- Don't be tempted by things like swimming pools or other amenities that can have limited appeal on resale.
- Paying down your mortgage ahead is best idea- No better way to get your money working for you is by paying down your mortgage ahead of schedule.
- Shorter amortization period- Consider a shorter amortization period or increase the payment frequency to pay off your mortgage. This will save thousands $ in your interest costs.