Grow&Co | Top 4 Things You Need to Know Before Buying a House
Top 4 Things You Need to Know Before Buying a House
If you're in the market for a new home, one of the first things you'll need to do is figure out your budget. This can be a daunting task, especially if you're a first-time homebuyer. But don't worry – we're here to help.
5 minutes | 9.02.2023
In this post, we’ll outline four things you need to know about your budget before buying a house. We’ll cover everything from mortgage payments to settlement costs, so you can be confident you’re making the right financial decision.
1. How Much Can You Afford?
The first and most important question you need to ask yourself is how much you can afford. This will determine the price range of homes you should be looking at.
To figure out how much you can afford, you’ll need to consider your monthly income, debts, and other financial obligations. You’ll also need to factor in the costs of owning a home, such as mortgage payments, council rates, insurance, and maintenance.
Once you have a good idea of how much you can afford, you can start shopping for homes in your price range.
2. What Are Your Mortgage Options?
Once you’ve found a few homes you’re interested in, it’s time to start thinking about mortgages. There are many mortgage options available, so you’ll need to research to choose which is the right one for you.
Some things you’ll need to consider include the type of loan you are after, the interest rate, and the term of the loan. You’ll also need to decide how much you want to pay as a deposit.
Once you’ve done your research, you can start shopping around for mortgage rates. Be sure to compare rates from multiple banks to get the best deal or speak to your local broker.
3. How Much Are Settlement Costs?
When buying a house, there are a few additional costs to consider beyond the purchase price. These include settlement fees, which are fees charged by the lender and other parties involved in the transaction as well as stamp duty and solicitors fees.
Settlement costs can vary widely, so it’s important to ask your lender, broker or solicitor for an estimate before you start the home-buying process. Usually, these costs can vary between 2% and 5% of the purchase price of your home.
So, if you’re buying a $700,000 home, you can expect to pay between $14,000 and $35,000 in settlement fees.
Settlement costs are incurred by both the buyer and the seller so by knowing how much you’ll need to pay, you can avoid any surprises down the road.
4. Building & Pest Inspections
A building & pest inspection is a crucial step in buying a house. This is when a professional inspector will come to the house and look for any major problems. If they find any serious issues, you may be able to renegotiate your offer or even back out of the deal altogether.
There are a few key things you should keep in mind before buying a house. Firstly, you need to consider how much you can afford. Secondly, get to know what your mortgage options are. Thirdly, understand all settlement fees involved. Finally, remember to get a building & pest inspection. With these things in mind, you will be well on your way to finding your perfect home.
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