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Preparing to buy a home: 5 ways it will impact your finances

by David Leto
March 28, 2018

Preparing to buy a home: 5 ways it will impact your finances

by David Leto
March 28, 2018

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Preparing to buy a property has huge financial implications. It's not like buying a gaming console or a flatscreen television wherein you can just shake off the expense or return it if you're unsatisfied with the purchase. 

Buying a home means committing years' worth of your income and savings into the property. It entails making payments month after month and possibly not being able to afford any other big-ticket purchase for some time. 

Here are five ways to prepare for a home purchase.

Hone in on a Location

Choose a location that best aligns with your needs, lifestyle, and circumstances. If you are buying a home for a growing family, for instance, you'll want to pick a location that has access to a pediatric center, hospital, school, and other essential services.

You'll also want to vet the neighborhood for its safety. A low crime rate and low instance of natural disasters are ideal to avoid the expenses of repairing and replacing personal belongings in the event of a break-in or fire. All of these things can contribute to the selling price of your potential home and what you can afford.

Get Pre-Approved

Your home buying plans can be cut short if you don't get pre-approved by your lender. It's best to do this task before you start attending open houses, consulting realtors, and meeting with home sellers. 

Keep in mind that there is a huge difference between someone getting pre-qualified and someone getting pre-approved. The latter is more important as it signifies that the lender has checked your financial information and is prepared to lend you money.

Be Wary of Sleeper Costs

This pertains to unpopular home-related expenses, like property taxes and utilities. You should know all of the fees ahead of time before you close on your new home.

If you need to refinance your home loan, you will need to find a loan office in your area. You can use companies like Homemortgage.com to help you find the best loan officer to meet your financial needs.

Avoid Crossing Neighbors' Borders

A border dispute isn't the best way to meet your new neighbors. But a lot of new home buyers in the market forget to factor this in when doing visual inspections of the property and/or reviewing the contract.

Know exactly where your property lines start and where it ends. This can save you a lot of trouble down the line should you decide you want to make any additions to your home or property.

Don't Attempt to Time the Market

Avoid obsessing about when exactly you should buy a property. While it's prudent to try and save a few thousand dollars on your purchase by timing it right, the housing market is simply too unpredictable to time.

If you can find a property at a reasonable price point and has the qualities you need and want, take a leap of faith and make an offer ASAP.

Buying a home can be daunting due to the financial impact it has on your life. There is a lot that goes into it that you may not be aware of if you have not bought a home before in your life.

It is important that you do your homework so that way you understand what the costs will be. It will also help you prepare and budget for your new home. It should also show you what homes you can and can't afford after you get pre-approved for your home loan. Use the five tips above to make it as smooth as possible.

 

This article was written by David Leto from 50plusfinance and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

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