When a person buys their first home, it is a very important and proud moment in their life. Buying a home is an investment that should not be taken lightly. When going through this process, there are many things to keep in mind before signing a contract to ensure you are making the right choice for you. The following at ten tips to purchasing a home:
Buy for the Long Run
As stated before, a home is an investment. This is why it is important to assume that you will live in your home for at least five years. According to the Zillow Group Consumer Housing Trends Report of 2017, most Americans who sold their home within the previous year had lived there for at least a decade before they sell.
Buy to Improve Your Life
A person’s home is a large part of their life and who they are. It is where they spend a great deal of their time, have company, and sometimes raise a family. You should choose a house that meets your needs, not one that you believe will have a significant short-term financial return.
Focus on What is Important to You
When beginning to look for a home, it can be beneficial during this time to make a list of basic necessities for what you want your house and neighborhood to be. This ensures that you do not become distracted by unnecessary, expensive features.
Set a Budget
Houses are expensive, especially in today’s market. It is because of this that it can be easy to go over budget in a competitive market. Setting a budget ensures you are realistic about what you can afford and how you can compromise if necessary.
Aim for a 20% Down Payment
It is ideal to be able to afford a 20% down payment. This is because those who don’t must pay a premium. In addition to this, a higher down payment reduces your financial risk.
Keep a 6 Month Strategic Reserve
A strategic reserve should be set up separate from a normal bank account to cover about six months of living expenses. This is a precaution in the event that you get sick, are faced with unexpected expenses, or lose a job. With this in place, you can prevent financial hardship.
By getting pre-approved, it shows sellers that you are a reliable buyer with good financial standing. To do so, you must organize paperwork documenting your income, debt, and credit.
Shop Around for a Mortgage
When people take a loan out on a home, they often do not look around for the best option for them. However, home loans do not always suit all people. There are different types of mortgages and it is important to make sure you are choosing the right one for your financial plan.
Do Not Spend More than a Third of Your After-Tax Income
A home can be more expensive depending on where you want to live. However, it is a good rule of thumb to spend about one-third of your after-tax income.
Do Not Be Afraid to Walk Away
Buying a home is a long and complex process. It is important to manage your expectations and make sure they are met before closing on a deal. If a seller does not accept your offer, do not be afraid to walk away from a deal that does not benefit you.
Contact our Firm
Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.