New Year, New Home: Setting Your Home Loan Goals for 2024

Before diving into setting goals, it's crucial to have a grasp of the current housing market. The landscape of real estate and mortgage rates is ever-evolving. Take time to research and understand the trends – Are interest rates rising staying where they are or likely to fall? What's happening in the real estate market in your desired area? Knowledge is power, and staying informed will help you make more accurate predictions and decisions.

Your financial health is the cornerstone of your home loan journey. Start with an honest assessment of your finances. How much can you realistically afford to borrow? How much debt are you carrying? What’s your credit score? This financial examination is crucial for setting a realistic budget. Remember, the goal is not just to buy a home but to do it without burdening your finances. 

Once you have a clear understanding of your finances, it's time to determine how much you can comfortably afford to spend on a home. This includes considering the down payment, monthly mortgage payments, property taxes, insurance, maintenance costs and utilities. A well-thought-out budget is your safeguard against overextending yourself financially.

The deposit is often the biggest hurdle in buying a home. The larger your down payment, the less you'll need to borrow, which means you'll pay less interest over time and could benefit from potentially lower monthly repayments. Aim to save at least 20% of the purchase price. If that seems daunting, remember, that even a small start can lead to big results. Start a savings plan specifically for your down payment and contribute to it regularly. While it’s possible to to still secure a loan if you have a smaller deposit, you may need to take out Lenders Mortgages Insurance (LMI) which adds an additional cost to your loan. 

There is no one-size-fits-all when it comes to home loans. Spend time exploring the various types of loans available - fixed-rate, variable-rate, interest-only, principal and interest, and others. Each has its pros and cons, and what works for one person may not be the best for another. At Rostron Finance, our trusted loan specialists can help you navigate these options to find you the best mortgage that fits your financial situation and long-term objectives. 

Securing mortgage pre-approval sets you apart as a serious buyer, giving you a clear idea of what you can afford when you start house hunting. This process involves a detailed review of your finances and can give you a competitive edge in the housing market. We advise starting this process early to avoid any surprises when you find the right property.

It's easy to get caught up in the dream of a perfect home. However, being realistic about what you can afford and where you can compromise is essential. For instance, a smaller home in a desirable neighbourhood may offer a better investment than a larger home in a less preferred area. Or perhaps you might consider a fixer-upper rather than a move-in ready home. 

Remember, buying a home is not just a financial decision but also a lifestyle choice. It’s important to consider how your needs might change in the future. Ask yourself: Is the location suitable for long-term living? Are there good schools and amenities nearby? A home is an investment in your future, so think long-term.

The world of real estate and finance is dynamic, and things can change rapidly. Stay informed about market conditions, interest rates, and new loan products. Flexibility is key – be prepared to adjust your goals and strategies as the market and your circumstances evolve.

Finally, don’t go it alone. Working with trusted loan specialists, like our experts at Rostron Finance can make the process smoother and more efficient. From understanding loan options to navigating the buying process our team is dedicated to helping you achieve your homeownership goals.