You probably have a dream home in your mind and are already mentally organizing your three car garage or choosing the perfect shade of green - celery, sagebush or martini olive - and have browsed the furniture stores a few times. This is the fun stuff. But before you get to that, there is work to be done. Follow these steps and you'll be moving boxes and eating pizza on the floor of your new home in no time.
1. Get Pre-Approved: Going to the bank is probably the most stressful part of the entire process but it is necessary. A pre-approval is going to give you a rough idea of what the bank will lend you. For your bank meeting, you are going to need a list or copies of your bills, debts, assets and at least three of your latest pay stubs. It's not the most exciting part of entering into home ownership but getting pre-approved before you start seriously home shopping could save you a ton of time and disappointment.
2. Crunch Your Own Numbers: The bank may be lending you the money, but they do not have the most in depth knowledge of your financial situation. You will be asked about your debt (student loans, credit cards, car payments, etc), your assets (cars, property, investments, liquid assets, etc), basic bills will be estimated, your credit score will be checked and eventually you will be presented with a number that apparently you can afford, right? Not always. You haven't eaten yet. Those nice new kitchen cabinets you bought are bare and the fridge is empty. Nor have you paid for the car repairs that will inevitably come your way. And the bank doesn't know that you enjoy a yearly family vacation, that you are planning on having another child enter into daycare, or that you have a dinner and drinks night out at least once a week. Use the bank information and your own to make the best financial decision for you and your family. The purpose is not getting (and spending) the highest number. It is about finding a home that fits your real budget and your lifestyle.
3. Decide The Purpose: This one is usually an easy decision to make. Buying a house isn't always to live in it happily ever after. Maybe you're purchasing a home as an investment or looking to obtain a rental property. Or maybe you are planning on raising your family and spending many years under that roof. Knowing your purpose is important up front because it's going to be a determining factor in what you should be spending. If it's a temporary home or a 'flip' house, you're probably looking for the best deal. If you want to grow old in the house, you're probably going to be willing to spend a little extra.
4. Make a List: Actually, make two lists. Must-haves and wants. This is going to make it easier when you are perusing the listings and when you are trying to decide between two or three houses. The must-haves are exactly that. They are what you, personally or as a family, need to live and function in your home. The wants are the extras that may end up being concessions if they are not in your price range. Perhaps you absolutely need three bedrooms and two bathrooms but want a home that is move in ready with neutral decor. It is a lot easier to throw a coat of paint on the walls than it is to build an additional bathroom. Some other things to consider when making your list - How much space is needed? Do you need or want a garage? Is there a certain area of town you want to live in? Do you want it to be move-in ready or are you willing to take on a few home projects? If you can answer questions like these up front, the home buying decision will be that much easier later.
5. Hire an Agent: Even if you don't have a home to sell, an agent can make the entire process simpler and less stressful. An agent will help guide, answer questions, and bring knowledge about the market that you don't have access to by going solo. Chances are that with an agent, you'll be munching on that celebratory pizza much faster.
Author Resource:
Hong Leong Garden will be revamped into a new mixed development up to 12 storeys of residential and commercial units. You can find out more about other new launches in Singapore at Propertychatter.
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