What You Need to Buy a House

Buying a house isn't a magic process and it's not about dancing in the rain either (maybe once you get approved it is!). It's really all about affordability and managing your finances so you have enough for a down payment and you can prove that you can pay your home loan every month for the next 20 to 30 years. While a 30 year home loan shouldn't steer you away from buying property, it is important to be realistic about the process and what to expect. For some people, getting approved for a mortgage can be easy while others struggle for years to get approved for a small mortgage.

In this guide we look at what you need to buy a house in 2021 and beyond!

What You Need to Buy a Home

The decision to purchase a house is not a small one and while many people buy property all the time, investing in one yourself is a big feat and a major financial responsibility. Even if you can afford the mortgage every month, some factors may prevent you from being qualified for a home loan. Worse yet, if you can just manage the mortgage repayments and a financial disruption happens, it could affect your ability to keep up with your house payments every month.

The best way to buy a home is to prepare thoroughly with what you need from your documentation to your finances. Let’s look at the options for purchasing a house.

1. Getting Pre-Approved

Very few of us have the cash up front to put a down payment on a property and to get approved for a mortgage. Many people continue to rent for most of their lives because the mortgage process makes it difficult to get approved. Whether you earn a fair full-time salary or $12-$16 an hour buying a house can be achieved with the right plan.

When you need to get approved for a home loan, you’ll have to prepare the following documents and information:

• Proof of income

• Credit history

• Proof of employment

• Social security

• Other supporting revenue streams

A mortgage reviewer will assess your information and advise on how much you qualify to get the mortgage.

It is a good idea to get pre-approval so you know how much the bank is willing to give you and whether you will have to make financial arrangements outside of the budget you have allocated to the loan.

2. Preparing for the Down Payment

This stage is all about saving. Putting money away every month can help you build a decent down payment so that it brings down your total mortgage and puts you in a better light with regard to the home loan.

Depending on the property requirements, you could pay 5% or as much as 20% as a down payment on a house. The more you can save to put down, the better. It can provide a better interest rate and it can help reduce your monthly repayments

3. Work on Your Credit Rating

A factor that many applicants fail to consider is what their credit rating looks like before applying for the loan. Even if you can afford the mortgage, your lender must consider your expenditures and your repayment habits. If you have a negative credit rating but sufficient income to cover your loan, you could get approved but at a very high interest rate.

4. Choose the Right Mortgage Provider

There are different mortgage lenders available so applying to each to get the best interest and the highest possible home loan can make all the difference. You should also consider reviews of different providers to help you choose a lender that is fair and reliable. This will also help you determine which lender is willing to give you a higher loan and a more affordable interest rate.

5. Stick to a Savings Plan

The best way to prepare for purchasing a house is to build savings. Your financial status is an important part of investing in property and your mortgage provider wants to know that you have enough every month to be able to afford the repayments.

You Can Buy Your Own Home with Positive Affirmations

The process of buying a house can be a long one and you may find yourself going back to the financial drawing board but don't be discouraged. The power of positive affirmations and believing in something can help you attract positive energy and keep you motivated to save money for your deposit and your home.