Regardless of what the people around you are saying, it is perfectly feasible to find and purchase the home of your dreams in one year. It requires a lot of planning, dedication, funds, and a bit of luck, too. However, with proper organization, you can achieve your goal in less than a year. Here are the steps which need to be taken if everything is to run as smoothly as possible, despite the numerous hiccups that are inevitable to appear.
Start Saving Money
If you are planning on investing your savings into real estate, chances are you’ll be in need of some more cash, too. It may be that you are trying to enlarge your deposit, or you are preparing for the plethora of additional and possibly also some unexpected costs.
Apart from the most obvious ways of saving, such as reducing unnecessary costs i.e. shopping, social gatherings and overseas trips there are some other solutions, too. For instance, consider renting a cheaper house, moving in with family or even buying a caravan and parking it on a friends lawn. This should save you a lot in a year. Also, think about whether you really need a car to get to work, could you downsize to a 1 or no car family? Bikes are healthier as is walking. Public transport is often underrated and can be far less stressful than dealing with rush hour traffic in your car. You may find that as you make changes to save money it may even lead to healthier habits.
Check Your Credit Score
While you may believe you are a financially responsible person your credit score may not reflect this. Make sure that you have settled all the remaining debts and keep up to date with payments. If your credit score is poor it may take some time to improve it before you are able to access the best loans.
Calculate Your LVR
Loan to Value Ratio is very important because it is a very good indicator if you are going to need some extra money (i.e. borrow from friends and family, or apply for a bigger loan). For instance, if you’re trying to borrow $500,000 to buy a $600,000 home, your LVR would be 83%, which is considered fairly high. Of course, you can still buy a home, but it is more difficult and often leads to a long decision making process. Fortunately, there are a couple of ways that you can lower your Loan to value ratio to less that 80%, thus increasing your chances of purchase.
In the meantime, begin looking around and visiting open houses. The key to successful search is prioritizing. Decide what exactly you are looking for. Make a list and write down the deal-breakers, as well as those which could be considered as a compromise. It’s much easier once you know what to focus on. Clarity around what you want and what you need, and the difference between the two will help immensely when it comes to decision time.
Start collecting the paperwork to get pre-approved. Once you successfully deal with your credit score, it is time to get a stamp of approval that you are a serious candidate. In cases when you are making an offer, this piece of paper will give you an advantage over the other pretenders to the estate.
Choose The Lender Wisely
As hard as it may be to find a perfect home, finding the best lender can also be difficult. Fortunately, today there are companies doing much of the work for you, so you can have a home loan comparison of all the top lenders based on your preferences and personal circumstances.
Last but not least, one of the most important of all tasks is a visit by a home inspector. Have a professional take a look at everything, from the floor to the ceiling, there may be hidden flaws, costly damage or repairs that will need to be accounted for in your financial workings. Ensure any discoveries by the inspection are taken into account before you make your offer.
Finally, even though one year is a relatively short period, if you are organised, disciplined and keep moving towards your goal you are far more likely to be able to achieve it. Apply these pieces of advice and you will be well on your way!