Buying a home can be an emotional process, but it’s important to approach it logically. It’s all too easy to get carried away with a house you can’t afford or installments you can’t keep up with, hurting your ability to build wealth down the line. To make your experience a little less overwhelming, we have compiled four tips to help you navigate the process, save money and close the deal:
- Plan every step: A successful home buying experience is all about careful planning from start to finish. Your first step in buying a home is to consider the main costs, which is typically your mortgage.
When it comes to your mortgage, the last thing you want to do is jump into a decades-long home loan that’s too expensive for your budget. Many financial advisers agree that people should spend no more than 28% of their gross monthly income on housing expenses and no more than 36% on total debt. You can also use an online calculator to calculate a loan that fits your financial situation. When comparing mortgage lenders, look for flexible repayment plans with special interest rates, especially if you’re on payroll. Many banks have mortgage programs to suit your needs, like CIB’s Mortgage Loan. Use a mortgage calculator like CIB’s to help you make a realistic plan. Don’t forget to account for additional costs that can add up, like maintenance fees.
- Consider the market: While there are no guarantees you’ll qualify for the mortgage you want, there are steps you can take to improve your chances of getting a mortgage. The type of property you buy influences your mortgage rate. Lenders tend to be conservative, so you want to be careful when selecting your property. Certain properties are deemed riskier to lenders, so do your research before you fall in love with a place that might not appear secure. Reduce potential risk by working with experts throughout the homebuying process, including reputable real estate companies, brokers, and appraisers.
- Keep your credit score in mind: Lenders review your credit report, which details your credit history, to determine whether you qualify for a loan and at what rate. The Egyptian Credit Bureau uses the I-Score, developed specifically to reflect the specific needs of the Egyptian Credit Market while following the best international practices of international credit bureaus. Your credit score ranges from 400 to 850, with the higher scores representing better credit decisions, which can make lenders more confident that you will repay your future debts as agreed.
Read our previous blog post on credit scores to learn more about them, including how to find out your score here.
- It’s always helpful to learn about the home market you are going to make a purchase in to understand common patterns and tricks. Try to stay up to date with new governmental regulations and CBE mandated mortgage products. The Egyptian housing market has many complex real estate registration requirements, so it is a good idea to get a lawyer to conduct the appropriate searches and provide you with legal advice regarding your purchase. Check out this list of real estate lawyers in Egypt to get started.
Finally, the decisions you make when buying a house can make the difference between creating a home for your family and dealing with a large financial burden. By demystifying the process, you can prepare yourself for the challenge while enjoying the experience. Now that you know what to expect, you can get the most out of your purchase. When it’s over, you’ll have a newfound confidence that comes from making a major life decision. Happy hunting!