Check These Factors Before Taking A Home Loan

You may be required to purchase a home irrespective of the market conditions

. You may not want your dream of owning a home go haywire, because of market realities. Though the experts opine that you should purchase a home when the market conditions are favorable, but you may be required to purchase your dream home when requirements come. However, with proper knowledge about the market and right negotiation skills, you can also make a right purchase even in the down market. Here we discuss about some tips that you need to follow while making the purchase, irrespective of the market conditions. Here it is to be noted that your income, price of the house, loan amount, home location, mortgage costs etc play vital role in your decision to make the purchase.

Affordability

The first and the foremost thing that you need to look into while purchasing a home is your budget. The mortgage loan that you take out to purchase your dream home should be affordable to you. In other words, you should be able to make the monthly mortgage payments quite comfortably. You can also take the help of a mortgage affordability calculator to find out the mortgage loan that you can afford to pay.

Costs of the mortgages

A large number of lenders are available in the market with bevy of mortgage offers. The rates offered by these lenders vary widely. You need to conduct a thorough research to find out the mortgage loan which suits you best. Apart from the monthly mortgage rate of interest, there are various other costs associated in a mortgage loan. You need to take into consideration all the costs such as mortgage points, closing costs, mortgage processing fees etc before making the decision to purchase a home.

Location of the house

Another important thing that you need to take into consideration while purchasing a home is the location of the home. The house should not be located far away from a prime location. You need to ensure that the house is located near to market, hospitals, schools etc.

Resale value of the house

Another important thing that you should take into account while taking out a loan to purchase a house is the resale value of the house. In future, life circumstances may change and you may have to sale your house. Make sure that the house you purchase has a good resale value.

Property insurance

You also need to consider that your property may damage severely due to some natural catastrophe. You need to insure your property from such damages. You must keep aside some money for paying home insurance premiums.

Get pre-approved

It would be wise to get pre-approved for a loan that you have decided to take out for purchasing your home. The rate of the loan that you have taken out may go up anytime. So, in order to take the loan, you must pre-approve it well before taking out the actual loan.

This check list will surely help you in making the right home purchase.

by: jessica

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