3 Must follow rules for first time home buyers
Hey first time home buyers you should be extra careful while buying your dream house. Its years of hard earned money are at the stake. If something goes wrong you will be doomed financially.
Track your credit score
Set your math right. You can get credit scores for free. Unlike past, now you can get your credit scores from your credit card holders and from the banks. Request credit reports from top bureaus: Transunion, Experian and Equifax. Or check the last month credit card statement. You will find your scores. What to do with these scores? Your loan eligibility depends on the scores. Sometimes organizations wont update the latest scores in spite of paying all the loans. This stops you to buy house immediately. Some home owners are in dire status to sell the house and they are ok to sell with steep discounts. Just because of bad credit scores you may miss the sweat deals. Therefore before searching the house set the credit score right.
Calculate the EMI vs Monthly Income
Your eligibility of loan amount depends on the monthly salary. It is easy for banks to process the loan based on the salary you are drawing each month. If you are getting additional income it is added advantage to repay the loan swiftly but won’t help that much to get big loans. If you talk with sales team about your loan eligibility they may say that you get 60 times of your monthly salary. However while processing for loan you will come to know that it’s not 60 times, 10 or 15 % lesser than what sales team claims about your home loan eligibility. Banks won’t consider the medical allowance that is in your pay slip. With the above information you will come to know how much you are eligible for loan. Based on the findings try to approach buying the house or apartments.
Be ready with down payment?
One common mistake new home buyers do is they ignore the initial down payment that need to be paid for builder. Bank won’t facilitate entire amount you have been looking for. Traditionally, builders look forward to get 20% of the total cost of the house. The best practice for buying any house is to have 20% cash with you. The more cash you have the lesser loan you have to pay, the lesser EMI will be, at the same time faster you can pay. Of course in some cases 10 or 15% is enough but you need to pay bigger EMIs for longer term and it would be heavy.