How can I get into property investing? Investing in a home is one of the most significant decisions an individual can make in his or her lifetime.
Whether the acquisition is the first property investment or a second home, this entails planning and researching. Have you been dreaming of owning a house and are finally preparing to make this quantum leap in your life? Or perhaps you are getting married and looking forward to start your family. Looking for the perfect home can be both exciting and overwhelming. This is why it is important to know what areas to consider when buying a house. Here are some tips to help when asking the question “how can I get into property investing?”
- Credit Score Rating
Unless you can afford to pay for the house in cash, you will probably have to apply for a mortgage loan. Having said that, it is imperative to have a high credit score to ensure you have a higher chance to get approval. What you can do is to ask for a credit report from one of the credit reference agencies: Experian, Equiifax and Callcredit. This way, you will know your credit history and see if there are discrepancies submitted by creditors. If there are, you will have the chance to correct them.
- Market Value
It is also important to know the market value of the property you are interested in to give you an idea of the amount of mortgage loan you will be needing as well as how much you will be able to get. Remember that the approval of your loan and the amount of money will depend on the mortgage valuation of the property and this relies on the value of the property based on what the surveyor will submit to yr potential lender. Lenders lend money for profit and will not risk their money on a property with a value lower than the amount they will lend you.
In buying a house, it is equally essential to know how much you are willing to pay for the property and if you can afford it. If you are planning to apply for a mortgage loan, it will help to consider investing in a home costing at least two and a half times of your household income for a year. However, if you have other obligations such as car loan or other credit card payments to make, it is best to look for a much cheaper property. One way to determine if you can afford to pay is to consider the down payment being asked by the seller of the property.
When you apply for a mortgage loan, your potential creditor will be looking at your capacity to pay back the loan. This is why it is important to prepare very well for your property investment. Before you apply for a loan, see to it that you have savings to cover at least three months worth of your mortgage payments. Additionally, you will be looking into an expenditure of about 2.5% to 3% of the value of your home for the yearly maintenance and repairs of the house. This is why it is practical to save separately for the upkeep of your home.
Once you have an idea on how much you are willing to spend for the property, the next thing to consider is the house itself. Location is one of the most important factors to keep in mind. If you have school children, consider the property’s proximity to schools and hospitals. Also, the neighbourhood is also a factor to consider as well as the access to transportation. When it comes to the structure itself, decide what type of home you prefer and how much space do you need.
If you are buying a pre-owned home, repairs are more likely needed before you move in. This is where a home inspection report comes in handy. You can hire an independent surveyor or home inspector to check the structure for damages. This way, you will have an idea if the property is worth the seller’s asking price.
- Property Listing
One way to search for potential homes is through an online agent that has a list of properties that are for sale in the market. What is great about a team of estate agents is the expertise and knowledge they have when it comes to selling properties. They have been dealing with buyers and sellers for years and are up-to-date with property market trends. Moreover, they can assist you in closing the deal and signing the contract. Take a look at our rage of investment properties here.
- Mortgage Application
While looking for the property to buy, you are also looking for the right lending institution or agency to help you in acquiring your new home. It is important to check on different lending companies before making your decision. Also, prepare all the documents needed for your application. You can prefer to apply for a loan with a fixed rate or one with adjustable rate mortgage.
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A house is an important investment any individual can make. In fact, it becomes cheaper in the long run compared to renting a house where one pays for a property that he or she cannot own. However, this can also be difficult to sustain and maintain without proper planning and knowledge about the factors to consider when buying a home. So, if you are planning to buy a home, take to heart these considerations.
We hoped you enjoyed the article “How can I get into property investing?”. Are there any ideas you have to help people on a similar journey? Please leave a comment below.