Since, for most, the value of their house represents their single most significant financial asset, doesn’t it make sense for home buyers to proceed wisely and in an aware manner throughout this process, especially from various financial considerations? After over 15 years as a Real Estate Licensed Salesperson in the State of New York, I have witnessed the critical process and many potential ramifications when any short-cuts are attempted/ created! With that in mind, this article will try to examine, review, and discuss 6 of these considerations, why they are so significant, etc.
1. Creditworthiness: Before beginning one’s so-called hunt for a home of their own, he should carefully and thoroughly consider the full extent of his creditworthiness! What might be in one’s credit history, which might make getting, the best mortgage and terms in a timely, less – stressful manner? Go beyond merely the Credit Rating, but either yourself or have a trusted mortgage professional, examine it from the perspective of getting a mortgage, and what steps might make sense, and when, in advance, before beginning! This will guide you to knowing what you are qualified for and what you may be able to afford; however, don’t forget to consider your comfort zone as it relates to this process!
2. Down-payment and Closing Costs: Although some types of mortgages allow lower down payments, a Conventional Mortgage generally requires 20% down! Do you have the necessary funds and the prices needed, known as Closing Costs (often many thousands of dollars or more)? If you do, will use your funds for this purpose present future ramifications for preparing for repairs, renovations, and unforeseen expenses involved in home ownership?
3. Afford monthly costs/ expenses: How confident are you that you can comfortably afford the monthly costs and fees of owning a house? Consider all costs, including the mortgage (principal and interest payments), real estate taxes, escrow items (such as insurance, etc.), and the savings to maintain reserves for contingencies, such as repairs, renovations, upgrades, and appliance-related costs, etc.!
4. Prepare for repairs: Some repairs are predictable, somewhat – standard, and to-be-expected, and some may be unforeseen! A wise approach is to create a separate account/ fund, specifically for repairs, and put a realistic amount in monthly to self-insure and be as prepared as possible!
5. Renovations and upgrades: Most people have some degree of individual taste, and, therefore, almost every new homeowner makes specific changes, especially in terms of decorating, refinishing floors, painting, etc. Other renovations may include addressing the fixtures and appliances in the kitchen, the Heating, Ventilation, and Air Conditioning systems, etc. In addition, many people decide they need to upgrade or make other changes/ alterations! The reality, and best approach, must be to be prepared from the beginning/ onset!
6. Will you find home ownership part of the American Dream, or will it be a nightmare?: Doesn’t it make sense to attempt to make this event, and the act, of owning a home, of your home, as enjoyable as possible? The alternative, often, maybe unnecessary stress!
Before you consider buying a home, be as prepared and ready as possible! Will you be?