According to a research conducted by the real estate information company Zillow, 52% of homeowners view their homes as a financial investment while another 48% see it as a reflection of who they are personally. It is important to make the right decision when house shopping.
Here are some facts you need to know but not everyone will be honest enough to tell you.
- If You Are Qualified, You Don’t Have To Pay Money
Take every precaution when carrying out the mortgage rate you were approved for. While your finances may look good on paper, only you truly understand them in the context of your lifestyle.
Buy a house you know you can afford, not the one the mortgage company thinks you can afford. It will be in your best interest to leave yourself a fallback plan in case things go in an unexpected direction.
The real estate firm, Trulia, recommends limiting payments to no more than 30% of your gross monthly income while some lenders recommend 28% for housing related costs like mortgage, insurance and taxes.
- Furniture Budget May Exceed Your Plans
Depending on the house’s architecture, space and style, your furniture might not be the right size for your room or might be a completely different aesthetic altogether.
Ensure you have a hard look at what you can and can’t take with you and sell what won’t work in your new home . Furnishing a new home from the scratch can cost you up to 25% of the home worth. Try your best to refrain from embarking on a spending spree and focus on upgrading slowly when you move in.
- Your Monthly Payment Isn’t Just About Mortgage
To get a more accurate picture of monthly house-related finances, you will need to take into consideration homeowner’s insurance, property taxes, utilities as well as possible homeowners’ association levy. This could bring your cost up to 5% of the home purchase.
- School Districts Matter
Even if you don’t have kids , buying a home in a topnotch school district will bode well in the long run when you start having kids. Chances are your first house will have gone up in property value and will go off the market faster owing to new home buyers looking for a great school for their kids when next you are ready to move on to your next home.
- You Don’t Need 20% Down Payment
While it is an ideal option to pay 20% down when buying a house, it is not your only option. You can pay a premium for the extra risk lenders take usually in the form of Private Mortgage Insurance(PMI), in which you pay 1-2% of your home’s value annually in monthly payments until you have a 20% equity in your home.
- If You Don’t Plan To Renovate, Hire A Contractor
You’ll want to bring in a home building/maintenance contractor to obtain a realistic estimate of what it will cost to fix those repairs after you’ve acquired your house. The seller’s agent typically offers credits for repairs, but hold off on accepting them.
Above all, make sure that the home you are applying for is structurally sounds and that it is the house you want. Otherwise, you could end up trying to sell your house fast to a local property company sooner than you think.