Have you decided finally to buy a home? Buying a home has its own perks and risks. It is one of the most important decisions in one’s lifetime. From checking out prices, locations to choosing a realtor, you need to keep in mind a lot of things before eventually putting your finger on one. The buying price is just one thing, but there is a great deal of other issues that you must be aware of. Ignoring these might collapse your idea of having a dream home. Take a note of the following major points for acquiring your dream possession:
- Get a reliable realtor:
Realtors or estate agents get a share of the sales price of a home. This is why, some buyers are sceptic about contacting a realtor or an agent fearing that it would expand the expenditure. For that matter, you need to know that the realtor is going to bag his commission from the seller, not you. But there are agents who represent the home sellers known as listing agents; these agents do not give a thought to protect your interests as such and is most likely to grab commission from both the sides. Avoid such an agent or you will end up wasting money. Contact a buyer’s agent who will safely guide you through the entire process, right from negotiating prices to handling home inspections.
- Purchasing a house includes contract:
Remember that your dear home will be bought on the basis of a contract. There is going to be a huge number of papers that you have to sign. These papers are basically contracts. You are wrong if you think that these contracts do not allow you to make negotiations since they appear to be so ‘standard’. No, they do allow you to negotiate. Do not go for signing standard agreements so readily. You can take time to review your assessments, re-examine things or think of mortgage approvals. A smart realtor can help you in these areas.
- Take your commitment seriously:
Buying a home is a very serious financial commitment that you are about to make. Reflect on your long-term plans wisely before investing. Both your professional and personal life are going to be significant factors you need to contemplate upon. Get done with a written agreement and keep an exit plan ready if you are buying the home with a partner who happens not to be your spouse. Think of your abilities to pay down any equity depending upon the market scenario and the terms and conditions of your mortgage. When you have found a home, make sure it is the one, or else keep your search mode on. It is not only about mortgage liabilities but also about the laws of a state on which the treatment of your property depends. Make a thorough study of such laws or you might have to pay an unpleasant price. You can consult a real estate lawyer for judicious opinions.
- Consider the costs properly before restructuring/repairing:
You may not be content with some part of your dream house already. That is okay! It may not be that expensive to fix a room according to your wishes or change some wallpapers, paints or cabinets to your requirement, but you need to look beyond that. Do not forget the labour cost which can enlarge your investment. That does not mean you have to give up on fixing, but give a prudent thought to costs inclusive of everything.
- Do not be impulsive. Know what you can afford:
Many factors would determine what your investment is going to be like. It is not just about getting a mortgage approval easily, it is about whether you can afford these mortgage payments. Visit a mortgage broker if you want to analyse carefully how the things are functioning.
Also make a note of factors like insurances and taxes, interest types, market condition and your earnings to form a more practical decision.
- Don’t rivet your eyes on the purchase price:
The purchase price is just one thing! Make a detailed study of all the costs associated with your new home:
Property taxes, fees for HOA (Homeowners’ Association)
Costs of packing, transporting and moving
Cost of utilities like water and electricity
Costs of furniture and other necessary equipment and appliances
Cost of repair and renovations
PMI or Private Mortgage Insurance (in case your down payment is less than 20% of the home’s purchase price
- Student debt loan to be considered:
First-time home buyers who have student loan debts may face the adverse effects of FHA guidelines. If the student loan is in postponement and you are planning to buy a new home, it is recommended that you enroll in a properly registered income-based repayment scheme. Your lender will get the documents then, which he needs to estimate your existing liability.
- Don’t be too obsessed with Mortgage Interest Deduction:
Mortgage interest deductions are not always reliable. Many potential buyers think that they can buy more houses by calculating that they can save a lot with the mortgage interest deductions. You cannot rely on the fact that you are going to have the same savings level forever. Precisely, the longer you remain the owner of your house, the less interest you have to give.
- Buying house is not compulsory:
There is no decree that you must buy a house. Purchasing a house is a colossal decision. You may not be financially ready for it. Your family or job plans may be ever-changing, so you may not be able to take firm decisions. You can check out rental markets (you may take a realtor’s help here), and choose rentals over home-buying projects. This way you can safeguard some cash and remain flexible.
Last but not the least, always start with an emergency fund so that you are not unprepared when various costs come up unfavorably. Try to do a maximum saving in your Retirement Savings Account. After the mortgage is paid off, the monthly payments which were being done could fund some of your medical expenses in the period of retirement. Complete a thorough research before you buy your dream home.