You’re excited to buy your first house, but as it turns out, the process is more complicated than you would have ever imagined, especially in the finance department. Buying a house is a huge investment after all. You need to take all the necessary steps to make sure that you’re still financially secure after you seal the deal.
Pay off your debt and stay debt-free.
Owning a home is undoubtedly expensive—more expensive than renting because you will be responsible for maintenance costs. So before you dive into the home buying process and start looking for properties in Bloomdale, make sure that you pay off all your debt first to avoid digging a deeper hole for yourself. You should also have at least three months’ worth of expenses in an emergency fund so you’ll have money to use for unplanned expenses on top of paying the mortgage.
Once you’re done paying off the debt, stay debt-free by being mindful about your budget for furnishing and decorating your new home. And if you’re not financially ready to make a purchase yet, don’t be afraid to let go of that house you’ve been eyeing on because there’s always a better house ahead.
Save up for a downpayment.
You don’t have to save up for the full payment of a house if it’s still not possible with your income. But you can at least save up for a downpayment of 20% or more. Aside from lowering down your monthly payments, you can also save a substantial amount by not having to pay for private mortgage insurance, which is 1% of your loan’s total value.
Re-evaluate your budget.
A lot of first-time homebuyers make the mistake of assuming that they’ll only need to pay for the house and nothing more than that. But you have to remember that once you’re done with the downpayment, you’ll also need to think of other costs like renovating or furnishing your home on top of your usual daily living expenses.
For this reason, it’s very important to re-evaluate your budget and cut down whenever you can so you’ll have some breathing room for those extra costs after buying your house. Sacrificing your budget for shopping or dining out will reap you bigger rewards in the future. And if you’re struggling with budgeting, you can always seek professional financial advice from companies like Lifestyle Financial Services.
Be open to adjustments.
Chances are, you already have a vision of how you’d want your home to be. But once you start shopping for properties, you should stick to a home for sale within your price range to avoid spending more than you can afford and end up being in debt after buying your house. You can also check out different locations because some homes are cheaper in other neighbourhoods.
As you step into a huge milestone in your adult life, it’s very important to know how to do things right so you can fully enjoy your home without any worries at the back of your mind.