The process of buying a home can be a bit daunting. After all, there are many things to consider and no room for mistakes. Lots of people focus only on the interest rates, but you should consider other factors as well. When you intend to buy a home, you have to comply with your monthly budget, job security, debt-to-income ratio, down payment, etc. You even have to assess your emotional state because it can be critical during such a big commitment as buying a home with a mortgage loan. Now let’s see what is most important to pay attention to in a little more detail:
Type of Home You Want
Before you commit to a purchase, the first thing to do is determine what type of home you want – an apartment or a house, with or without a yard or garden, basement, garage, etc. You might have a long wish list but you have to bethink about whether you can afford to finance all your ideas. If not, you can review some offers for bank loans, choose the most advantageous one, and apply. Also, if you are thinking of buying a new home, you should look for a residence in a convenient location. What is the point of buying a house or flat at a lower price if it’s going to be in a remote neighborhood? If you take out a mortgage loan, you will be able to buy exactly the type of home you want.
Your Debt-to-Income Ratio
When you apply for a mortgage loan, the bank uses the debt-to-income ratio to check if you can afford to make the necessary monthly payments. The debt-to-income ratio is the percentage of the client’s monthly gross income that is used for paying debts. No one knows your financial situation better than you, so before you request a mortgage loan, make some calculations and weigh your options. Financial institutions usually give a desirable debt-to-income ratio, and you have to check if your monthly expenses exceed that amount. Some lenders have very high interest rates, so be careful what offer you choose.
The Down Payment
When it comes to buying a property in Bulgaria, the biggest obstacle buyers face is the down payment. Sometimes it’s just too high according to consumers and they find it difficult to save up that much. Here is why you have to compare offers from different banks to evaluate which one is most favorable for you. Fortunately, there is already detailed information about such bank loans on the internet and you don’t need to visit offices to get informed. Nowadays, there are various types of mortgages and down payments and you can find a good offer even with a lower credit score. Therefore, don’t get discouraged and take your time to search for the best option.
One of the most important things to determine when buying a home is how reliable your job is. It would be really bad to take out a mortgage loan and find yourself unemployed soon after that. This is also the reason why lenders always require secure income to grant such type of loan. So, make sure your working position is dependable before committing to a mortgage loan that will last for many years. If you have any additional income, that will be in your plus too.
Price and Condition of the Property
If you have considered any types of mortgages and decided to buy a property, you must consider its condition and check if it’s worth the price. Of course, one of the main factors regarding real estate is location. You’d better verify if your future home has easy access to your place of work, grocery stores, bus stops, and whatever else you need.
Factor number two to take into consideration is the size of the property. Don’t rush to take loans and pay high interest rates before you have checked whether the house or apartment is reasonably priced for its size. The age of the property is also an essential factor to consider. If you don’t have a budget for renovation, it might not be a good idea to buy an older estate. In case you won’t be the first owner, pay attention to how the property has been maintained. Prior to signing a contract for a mortgage loan, think of whether you will need money for repairs as well.