As a Managing Director at Bardale Village, I’ve had the pleasure of witnessing the joy first-time homebuyers experience when they step into their dream home for the first time. However, I’ve also seen the challenges and potential stress that can emerge when the process is approached without sufficient preparation.
To help smooth your journey to homeownership, I’m sharing some essential guidelines and advice for all first-time homebuyers.
Stepping Into Your Home-Buying Journey: Where Do You Start?
Before making that exciting leap, there are several essential steps you should take.
Boost your credit score for home loan approval
To qualify for a home loan, you’ll typically need a credit score of around 650. Scores range from 300 to 850, with anything below 600 considered poor and scores from 720 to 850 viewed as excellent. It may seem counterintuitive, but to improve your credit score, you need to take on and manage debt responsibly. This shows lenders that you’re a reliable borrower. But remember, only take on debt that fits comfortably within your current financial means.
Budgeting wisely: it’s more than just the purchase price
First, decide whether you’ll be using a single or a combined household income for bond repayments. As a general rule, your bond repayments shouldn’t exceed 30% of your income. But don’t forget that there’s more to homeownership than just bond repayments. You’ll need to account for additional expenses like closing costs, taxes, transfer fees, and ongoing maintenance. If you’re unsure how to work out your budget, I recommend consulting with an experienced real estate agent and a bond originator to help you arrive at a responsible budget and secure the best loan deal possible.
Secure pre-approval to streamline your home-buying process
I often hear people questioning the worth of pre-approval. From my experience, it’s definitely a step you shouldn’t skip. Pre-approval not only gives you a realistic idea of what properties are within your budget but also provides you with an advantage during buyer-seller negotiations. Having a bank’s pre-approval shows sellers you’re a serious buyer, making them more likely to negotiate. And contrary to common misconceptions, you don’t need a signed offer to purchase to seek pre-approval.
Choose the right home and neighbourhood for your long-term needs
Before you start house-hunting, take some time to reflect on what your priorities are. Consider your lifestyle, your family’s needs (like proximity to good schools), and the safety and security of the area. It’s also crucial to think long-term. Owning a home for at least five years is often needed to make it a worthy investment. With this in mind, ensure the property and its location will meet your future needs as well as your current ones.
Invest in a pre-inspection for peace of mind
I cannot emphasise enough the importance of a professional home inspection. It allows you to assess the quality and condition of the property independently and mitigate any risk of future disputes over undisclosed property issues. After all, you want your real estate experience to be pleasant not just today, but in the long run as well. So, getting a pre-inspection is a smart move to consider seriously.
In conclusion, homeownership can be one of the most fulfilling journeys you’ll undertake, offering both personal satisfaction and financial benefits. However, to navigate this path smoothly, it’s crucial to approach it with a clear understanding and adequate preparation. The steps I’ve outlined here aim to provide a solid starting point for first-time homebuyers.
Ready to embark on your home-buying journey? Here’s your next step!
Remember, at Bardale Village, we’re not just building houses, but communities. We understand the significance of making a house your home, and we’re committed to guiding you through this exciting process every step of the way. Get in touch and let’s chat about your first steps!
About the Author
Charles Witbooi is a Managing Director at Bardale Village, providing quality, affordable housing solutions for over 20 years. Connect with Charles and Bardale Village on our website for more home-buying insights and guidelines.