House for sale

Time to buy a home?

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Spring is nearly here! And while that means April showers and May flowers, it also means that home-buying season is about to start in earnest. For better or worse, buying a home – not to mention moving itself – can be a stressful affair. Here are some tips to keep in mind as you prepare to buy a house.

  • It’s not just a mortgage: Unless you’re lucky enough to be paying cash for your house, you’ll have a mortgage. And a mortgage doesn’t only consist of the cost of the home; it includes four parts known by the acronym PITI – principal, interest, taxes, insurance. In any case, be sure to budget for the full cost of your monthly payment when shopping for a home.
  • Look for a loan first: You’ll need a loan to purchase a home – unless, again, you’re lucky enough to be paying cash – and being pre-approved for a mortgage is a vital step. Too many people fall in love with a house first – bay windows, coffered ceilings, a big backyard – and discover in the application process that their dream home is out of their price range. Being pre-approved for a mortgage will help you make a smart financial decision rather than a tenuous, emotional one.
  • Take the long view: Buying a house can be a poor investment if it won’t suit your needs in a few years. Consider your personal situation when buying: Are you planning on having children soon? Will you be taking care of your parents at your home as they age? Are you physically capable of taking care of the house? In short, think about the life you want to live – both today and tomorrow – when purchasing a house.
  • Think about reselling: Odds are you won’t be in the same house forever. And if you can’t resell a home, you can get stuck with a pretty hefty bill. So always purchase with an eye toward your future and what makes the property attractive to potential buyers. It’s usually prudent to be wary of homes in bad neighborhoods, bad school districts or on busy streets – evaluate your personal situation and the potential of the home and the area in five, 10 and 20 years.

There are plenty of other issues to consider – such as finding a realtor – but by being patient and considering all the factors and you’ll make a smarter financial decision when purchasing a home. Good luck!

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Associated Tags: Budgeting, Big purchases

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