A Look at Few Financial Considerations which Affect House Purchase

Buying a house is a major financial investment. In case you are not aware of different factors which play their role in such purchase transactions then you can suffer losses. Thus you need to improve your knowledge and be prepared.

Finance is one of the most important aspects in any house purchase transaction. If you want to take the right steps and make correct financial decisions then it will be necessary to take into consideration many different factors. Our aim here will be to look at some such important factors.

Selling Too Early

Buying a house will not be a wise decision in case you do not have any intentions of staying in it for next 5-6 years. The reason behind this is that both buying as well as selling involves lot many transaction costs and other expenditures.

If you sell the home within a short period then you can end up suffering a loss even if market conditions are favorable. In case prices are going down, then the condition will be even worse.

Fix Your Credit

It is quite likely that you will require a home loan for purchasing the property. Thus you need to clean up your credit history since banks will be checking the same before approving your loan. Before you start off with house hunt make sure any incorrect facts are removed from your credit history. You also need to sort out any problems which may be affecting your credit rating.

Get the Home You Can Afford

A general rule is that you can afford a property which costs around 2½ times the annual salary you earn. However, you should also make use of many of the online calculators to check how much you will be able to afford by taking into consideration your debts, expenses and income.

Good School District

Even if you do not have kids of school going age, it is better to buy a home in a good school district. The reason is that when you contemplate selling the home you will find that it is one of the main priorities for many buyers. Having property in good school district will not only improve property value, it will also help in getting it sold quickly.

Get Pre-approval for Loan

The benefit of pre-approval would be that you will be aware of how much you can afford and can skip houses you are not in a position to afford. You will also be in a much better position to put a serious offer after locating that ideal home.

Some buyers often get confused about difference between pre-qualification and pre-approval and whether both are same. Pre-qualification is only a brief review of financial details while pre-approval on the other hand is given after thorough verification of your debts, income and credit history.

Proper Bidding

It is quite important to make the opening bid only after doing proper analysis of other properties getting sold in the neighborhood. Thus before making a bid it will be necessary for you to go through details of sales occurring in the last 3 months.

In case you find that properties are getting sold for 5% less than the asking price then you will have to make an opening bid which is 8-10% less than the price seller is asking for.

Finally, to summarize we will say that a house purchase involves substantial financial investment. You will certainly not like to take wrong steps and make a wrong investment.

Atiya Ara works for eZayed Real Estate Auctions and has great experience in the real estate industry. To check out more properties in Dubai, please visit Buy Property in Al Barsha and Property For sale in Al Barsha.

She specializes in real estate and property related topics and shares her knowledge regularly with users.