Finance

Just imagine what it would be like if every time you went to do your weekly grocery shop you had to figure out what it would cost to source the products, distribute the inventory and stock the shelves. Fortunately you can just pick up each item with a handy little price-tag on them already so you can skip the stress and nonsense that comes before it. Buying a property of course is not so simple.

Is this the right time for you to be buying? Are you financially comfortable?

FinanceWhen looking to purchase a property the first thing that you must ensure is that the time is right. It is all very well you deciding that you are ready, though you will also have to convince your financial lender of that as well. This means that you will have to be ready with a reasonable financial safety net to help with the forthcoming expenses and be relatively debt free. Of course every lender will understand that there are bound to be certain debts, however it is how you are managing those debts that will make all the difference.

Your debt to income ratio plays a vital role in whether or not lenders will give you the go ahead. Are you going to be a financial risk to them? This is the question that you need to ask yourself. Can you put forward the standard 20% down payment and meet the regular monthly payments comfortably? It is certainly a scary process, one that should be well-thought out before jumping head-first into such a large financial commitment.

Of course you will undoubtedly be able to find lenders that are prepared to offer you lower down payment terms, however this is something that you must be wary of. You could find a down payment for as little as 3% if you look hard enough, but this will likely cause you much grief in the long run as you will be obliged to pay greater monthly instalments. Be careful and most important of all, be prepared.

Do your research if you’d like to avoid any unwanted surprises

An incredibly scary statistic is that nearly half of new home buyers don’t bother with comparison shopping and almost always settle for the first deal that they come across. This is something that can cost you an incredibly large chunk of money in the long run, which can easily be avoided by putting some time into thoroughly researching the market and what’s available.

Even visiting 2-4 different lenders can save you a fraction of a percentage and provide you with a reduced rate. These savings may seem minimal at first glance, but if you could save a couple of thousand in the first five years of investment you have spare cash for either putting back into the property or spending on yourself. Lord knows you’ll need a holiday sooner or later!

There are always going to be hurdles along the way so don’t just set aside some cash because lenders require you to do so. Do so because you’re inevitably going to need it and the more you have the less stress you’ll have to endure. And so what if you don’t end up needing it?! You’ve got all of that extra cash to play with. It’s a win-win.