Buying a home is a massive financial risk, no matter how prepared you might be. Purchasing a home comes with liability, increased cost of living, unexpected stress, and more time commitments; however, the rewards for buying a home are just as great. Real estate ownership is an opportunity to build wealth in many ways. So be sure to get started on the right foot for a more successful real estate adventure using these 5 basic financial tips below:
(1) Prepare Before PurchasingIf you've been watching the market in your area, you're bound to notice how quickly homes come and go. This can create an urgency to rush the process, jumping on a house before you're truly ready to make the move. Preparation before purchasing real estate is simple, but requires patience.
Get your finances in order. This includes paying down outstanding debts, setting an accurate budget for daily living, and having a clear picture for what you can truly afford. Once you've done this, take the time to save for a larger down payment. Zero-payment down loans and small down payment loans are out there, but they come with many strings attached. There will always be opportunities to buy later, when you're ready.
(2) More Square Footage Equals Higher Cost Of LivingConsidering buying real estate to increase your living space? Besides the added cost to your monthly mortgage payment, plan for increases in these bills as well:
- Homeowners Insurance
- Heating and cooling costs
- Larger heating and cooling unit maintenance
- Water for home and lawn maintenance
- Larger appliance repairs
- Property taxes
- Home furnishings and renovations