8 Things to Consider Before You Buy a Home

Purchasing a home is a major decision, likely the largest financial move most folks make during their lifetime…

Below is a list of things you’ll want to assess before you take the home-buying plunge, in no particular order:
 

1. Looming large expenses - before committing to a specific down payment, be sure to account for any high dollar items that may hit in the next 2-5 years (new car, having kids, college expenses, care for parents, medical expenses, etc.)
2. Where you’ll end up - think job transfers, moving closer to family, relocating for lower cost of living, schooling/neighborhood for kids, where you’ll spend your retirement years…
3. The current market - we don’t suggest timing markets, as there are too many factors that can change “conventional wisdom” (i.e. – many thought the market was high a couple years ago, then COVID brought a new dynamic that saw markets explode). However, it’s always advisable to have at least a 5-year time horizon so you’re not vulnerable to interim dips.
4. Job/income stability - if getting a mortgage, will you have the future income to support that payment? Don’t overextend and commit to an uncomfortable payment that projects upon unrealistic future earnings.
5. Time horizons - are you buying a transitional home, or forever home? Be careful committing all your funds to a home you may not stay in very long. Consider a smaller down payment to preserve cash for the next purchase. Are you willing to be a landlord on the transition home? If so, this will limit funds available for the next. Real estate is not easily liquid!
6. Turnkey, or Fixer - do you want to purchase a fully upgraded home? Or try to save money by purchasing a home that needs work, which you’ll do yourself? Carefully consider construction costs, material availability, and timeframes. If going the fixer route, ensure you’re planning accordingly!
7. Qualifications - be sure you’re properly pre-approved by speaking with a lending institution before muddying the waters looking at homes. This helps you know what you qualify for and what your budget allows, enabling you to make a better decision, rather than an impulsive one.
8. Financing - will you search for a home you can pay for in cash? Will you put down as much as possible, or leverage and minimize your down payment? 15-year loan or 30-year loan? Are you budgeting a heavy 30-year mortgage when you’re 60, creating a cashflow crunch when you retire?

 
These are just a few of the things you should be mulling when looking at a home purchase. With over 20 years experience helping clients purchase homes, we’re well equipped to help you navigate the process. Feel free to contact us, we’re happy to discuss with you!!