Tuesday, January 7, 2014

Top Financial Factors to Consider When Buying a New House

Considerations in Home Loan
Are you eyeing High Springs Houses for your growing family, retiring couples or mere investments? One thing that you would ask about is "how much would it cost me"? In buying an estate, you should know that it isn't just the price of the house that matters. There are a lot of money involve. Owning a house is expensive. But with the benefits it can provide it is money worth spending. The strategy here, before you buy one, is to consider the present and future cost and your capacity to pay. You shouldn't be surprised that it will cost you more than you have planned.

How much can you afford?

Start with a realistic debt-to-income ratio. Your budget is the main concern. You must know how much you can afford to pay per month without cutting expenses for food, transportation and other necessities. Don't be blinded by the big house that will make you dine on peanut butter and jelly sandwiches for the next 10 or 20 years to come.

Big Expenses that you don't expect

Buying a home is business and certainly you will have to expect costs for doing business. There are other services and filings that you will need to pay. It includes mortgage application fee, home inspection, closing costs and unexpected charges. Also, if you hired a real estate agent, you've got to pay him or her for the service.

Lenders will ask you to pay for mortgage application that will cost several hundred of dollars. You are just in the first step, yet you are already paying a few dollars.  You can't just move in without home inspection. It will establish the value of the property and it will allow you to find problems in the house. Home inspection will protect you from underlying issues that can be corrected before you pay the owner.

Just before you move in

You want your new home to be move-in ready. Through home inspection you can identify what enhancements such as wood floorings and carpet installations should be done. It will entail costs, so you will need to be detailed in planning the cost of owning a new home.

Insurance and Taxes

You can't predict when will disaster or natural calamities hit the area, so you will need to insure your house. In addition, you must consider property taxes that can be paid as part of your mortgage payment. It is a hefty sum of money you will shoulder.

Down Payment

Some real estate developers allow you to move in with no down payment. However,  if 20% down payment is required, it would be daunting and dwindling. Using a second loan will cost you more. It is often called an 80/20 which means that the 20% going toward the down payment will have variable interest charges but it won't add anything to your equity that will go into your loan repayment.

Maintenance Cost

All houses have maintenance cost. It isn't surprising and everybody knows about it. However, you may neglect that it will also mean a lot of dollars coming out from your pockets.

Buying a new house require a lot of planning, time and considerations. Making decisions on the hoof may let you experience the grandeur of a house but a cut in your daily living expenses making you suffer for more years to come. Think about the present and future cost and align it with your capacity to pay. Your expenses should be dictated by your income.

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