There are many factors to consider when buying property whether you are thinking of the purchase as a mean of investment or just buying a house for you and your family. Either way, buying a real estate property is one of the largest investments you can ever make and should be preceded by as much research and investigation as possible.
Should I buy or rent the property?
Thousands of people own property on a leasehold or rental basis, where they own the right to occupy, but not the building itself. All they own is the right to live there for a specified period of time. Of course, buying or renting depends on your circumstances and likings. When you rent a home, you are entitled to a very limited number of changes on your property whereas when you own a home you can make almost any changes you want.
With the Arab countries current boom in the real estate sector, the improvements you make on the property you purchase can add to the value and high return of investment in case you decided to sell you home. In comparison, when you rent a home, you will not be able to benefit from the increase in the property’s worth. Again it all depends on your circumstances. If you tend to change residence quickly and prefer not to stay put in one place, renting is the solution for you.
How can I finance my investment?
The most common method of purchasing a property is mortgage. This mean of payment is a legal agreement by which the property is pledged as security for the repayment of a loan. It is used as a method by which individuals or businesses can buy residential or commercial property without paying the full value upfront. The borrower uses a mortgage to pledge real property to the lender as security against the debt for the rest of the value of the property. The careful balance between buying your home and then being able to pay for it is very important. If you are able to pump up your payments to settle your mortgage early or can pay the whole outstanding amount, it can be done and will reduce the amount of interest you will have to pay on the remaining balance.
However, there might be a financial penalty related to settling your low cost mortgage early which you should investigate about by reverting back to the terms of your mortgage agreement.
How can I locate low cost mortgage providers ?
There are several mortgage providers such as banks, building societies, or other financial institutes. A mortgage broker can assist you in obtaining the mortgage most appropriate to your needs. It is rewarding to hire a broker since they can usually secure conditions well below that which is offered directly by most Banks. The most crucial point in purchasing a property is making sure that you are on top of all financial obstacles that you might face in the process.
There are several companies which provide low cost mortgages for those with poor credit scores. You can find very useful information on the internet regarding this issue with websites offering a list of mortgage providers and brokers in several countries.
What happens if I’m unable to make my mortgage payments?
In this case, you should contact your mortgage provider right away as they can offer you guidance and assistance in this matter. Being late on your mortgage payments can gravely affect your credit score and make it very hard for you to obtain credit in the future. If you have other debts as well, consider discussing your situation with a credit counselor as he/she will be able to advise you in managing your money, offer answers to your current financial trouble and develop a tailored plan just for you to help you avoid future complexities. Remember, banks do not like repossessing property and surely you would rather not face the ordeal of losing your dream home, penniless and possibly still in debt.
Why should I get a life insurance?
Most lenders ask for some form of protection for the loan. This is just a precaution from their side to ensure that in the event of your demise or diagnosis of a serious illness, God forbid, life insurance will provide cash to your family which will help them overcome important financial hurdles like covering daily living expenses, paying off mortgage and college savings. Generally, banks do not like repossessing property and would prefer the loan to be repaid from an insurance policy should a serious event occur. Getting the right insurance is important since it comes in many forms.
In conclusion, property is just like any kind of investment and can fluctuate according to the overall market. In general, houses appreciate in value by nearly 4% or 5% a year depending on several aspects such as neighborhood and stability. Real estate rate of return may be higher than many other investments you make.