5 Financial Mistakes to Avoid When Buying Your First Home
Buying a home is one of the most important milestones in a person’s life. In fact, 2019 is proving to be one of the best times to purchase a house for you and your family.
But, there are common financial mistakes that people fall victim to when preparing to buy.
Not sure where to start? Don’t worry, we’ve got you covered.
Let’s take a look at everything you need to know about what to avoid when buying your first home.
1. Buying a Home That’s Too Expensive
While it may be tempting to move into your dream home as soon as possible, take the price of the house into careful consideration.
Larger homes (or those in desirable locations) can easily be outweighed by the financial strain that the monthly payments will cause. Additionally, large homes require a lot of money in upkeep and have higher utility bills.
So, there’s no shame in settling for a smaller, more modest home that doesn’t push the limits of your budget.
2. Foregoing Other Financial Goals
Since homes are such a large financial obligation, it can often prevent you from allocating funds toward other things you need to focus on.
Money for car repairs, loan payments, or college tuition for your children often takes priority over buying a new home. You’ll have to readjust your budget if you’re looking to purchase a house while you have other payments you need to make.
3. Not Browsing Multiple Lenders
Would you buy the first car you saw on the lot?
Most likely not.
Seeing what different lenders have to offer could potentially save you thousands of dollars in the long run. You could also find yourself in an unfavorable situation with high-interest rates or hefty monthly payments.
Attributes like interest rate, penalties, eligibility, and the repayment period are all things to consider when browsing your options.
4. Not Factoring in Other Costs
Unfortunately, you won’t be spending money on just your future house.
Closing costs, Realtor fees, and insurance fees (such as title insurance and homeowners’ insurance) can quickly add up. If you’ve only budgeted for the down payment on your home, your financial future could be in trouble.
So, research all of the costs that you need to be concerned with and factor them into the budget for your home.
5. Spending All Your Savings
Some people forego financing options and choose to pay out of pocket for their home.
But, this could prove to cause complications in the future if you empty out your savings account. Not only will you be unlikely to afford to decorate your home (other than with what you already have), you’ll also find yourself without an emergency fund.
Dodging Financial Mistakes When Buying Your First Home Can Seem Difficult
But it doesn’t have to be. With the above information about buying your first home in mind, you’ll be well on your way to saving as much money as possible.
Want to learn more info about saving money as newlyweds? Then contact us today to see how we can help!
This article is for informational purposes only. Please be advised that this article is not intended as legal or tax advice or an offer of real estate services. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor. PPG-139592 (9/19)(Exp. 9/20)