The Logistics of Buying Your First Home

The logistics of buying a first home can seem onerous at times. This is, after all, the biggest purchase of your life. It’s a transaction which will ripple through your monthly budgets for the next twenty-five years. It will go through many renewals. There may be ups and downs. But finally it will be worth it.

Approaching Your Mortgage Lender

In order to buy a home, most people require the services of a lender. Before making a bid on a house, it is usually advisable to get a pre-approval on a mortgage. In other words, the lender (usually a bank) will assess your financial situation and agree to lend you a sum of money on certain terms. The sum will be paid back over an agreed period. The most common term is twenty-five years.

Employing a Broker

If you have trouble getting a mortgage from your lender, it may be time to call on the services of a mortgage broker or consultant. A mortgage broker acts independently. They assess your situation and negotiate with your lender on your behalf. With a large working knowledge, not only of the banking sector, but of the housing market, they can steer you towards the best deal possible. They’ll also recommend better offers from competing lenders, something your bank is not in a position to do.

How Good Is Your Credit?

When buying a house or seeking a mortgage, your financial situation and credit rating is very important.  A lot may depend on how much debt you’re carrying and your capacity to pay it off. It is recommended that your debt per month should not exceed 40% of your incomings.  Working with a mortgage broker or consultant, you can work out your monthly housing costs and see how they equate to your income. In general it is recommended that your housing costs per month should not exceed 32% of your gross monthly income. By “housing costs” we refer not only to your mortgage payments but all the associated costs of owning a house such as heating expenses and property taxes.

Thinking about the Future

It is important that you do the math in advance because these are variables upon which your lender will decide whether or not to approve (or pre-approve) your mortgage. A mortgage broker or consultant is useful to have in your back pocket because they speak the same language as your lender. They know when to push hard for a deal and when to back down. Buying a house is a momentous step. Seek the best advice you possibly can.