How To Get On The Property Ladder

You’ve been browsing the ‘For Sale’ adverts with longing. You’ve fantasized about cooking in a spacious kitchen instead of bumping elbows because the stove is too close to the sink. You want a new house. Buying your first house is a big milestone; it’s exciting, but also terrifying. So many things can go wrong and you’ll be left worse off than before if it all falls through.

Don’t worry; here are a few bits of advice that all first-time buyers need before they begin the climb on the property ladder.

Save your money

Owning a house is vastly more expensive than renting. You have to consider the property tax in the area, home insurance, and the fact that you will be responsible for the repairs if anything breaks.

Before you even get the house, it’s also recommended that you save at least 20 percent of a down payment, but some mortgage lenders might pre-approve you with less. Your state may also have its own programs for first-time homebuyers. Whatever situation you find yourself, it’s still a good idea to save as much money as you can. After all, it won’t hurt to have a nest egg after you move in.

Get a pre-approved mortgage

The paperwork at a real estate agency will go much quicker if you have a mortgage pre-approved. A reputable mortgage lender will factor in your income, your debts, and how long you’ve been at your current job to calculate your best deal. You don’t need a 20 percent down payment to get a good deal. The 43% debt-to-income ratio rule is generally used by the federal housing administration (FHA) as a guideline for approving mortgages. Although it can often change depending on market conditions, this ratio is the best way to determine if the borrower can repay the mortgage.

Look around

Even if you have your eye on a listing you saw in a condos for sale advert, it will be good to shop around. Prices can go up or down depending on whether there’s a good school nearby, how close you are to the city centre, or even what time of year you try to buy. 

Making an offer

Even if the owner wants to sell quickly, don’t be pressured into making a bigger offer than you can afford. - after all, you’ll be the one suffering when you can’t make ends meet. If you reach an agreement, you'll make a good-faith deposit and the process then transitions into escrow, which is a short period of time (often about 30 days) where the seller takes the house off the market with the contractual expectation that you will buy the house - provided you don't find any serious problems with it when you inspect it.

Get an inspection

Never buy a house without getting an inspection. Although most new homeowners are open to getting a fixer upper for a lower price, there are some things no amount of money can repair.