Posted by admin on Jul 11, 2017

Preparations to Undertake Before Making a Home Loan

One of the best investments that you can undertake is to buy properties, one of which can be your home. For starting families, buying your own house can be a good, although expensive, move.  Aside from being your residence, you can also use your house, if it has a land title, as an investment. You can even mortgage it to raise money in the future.

But more than an investment, your house will serve as shelter for your young family. How should you buy a property? Either you shell out enough funds to buy it in cash or seek the services of home loan brokers to secure funding (this is the usual method). If you choose the latter option, here are some steps in improving your chances of getting approved:

Set a goal – You should know the right home for you based on your present financial capacity and the size of your family. With a picture of the desired home in mind, you can now research based on your requirements. That way, you will know the exact amount of money you need to borrow. You should also find out the cost of your repayments. For best results, you can use online calculators to find out how much money you need to save and the overall repayments you must settle in the future.

Save for your down payment – Most real estate developers require buyers to shell out down payment (which is around 5%-20% of the overall cost of the house). Moreover, you need extra money to cover other expenses such as conveyancing and stamp duty (which may also cost a lot). Ideally, you should have saved enough money to use for down payment.  If you still short of money, you can also consult your home loan brokers to find out how you can have your initial payment.

Keep a tighter budget and savings – Since you are applying for a loan scheme, you need to tighten your budget for more than six months before you apply for a loan. Lenders want proof of your financial capacity and discipline for your loan to get approved.

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