Owning real property is an essential building block of financial freedom and wealth creation, especially if you know what to do. There are many different scenarios that could determine if purchasing real estate is the right thing for you to do. Because you will have a lot of questions it is crucial that you partner with a qualified professional to help you navigate the often times tumultuous waters of the real estate market.
The market literally changes on a daily basis and it’s important to have someone on your team that can help you understand the implications of your purchase. Eager for more information and excited about the next steps, but still unsure? Here are 7 Steps Before You Buy to help you decide whether you’re ready to take the plunge.
1. Check the selling prices of comparable homes in your area.
Search here on the site or send me a quick email (firstname.lastname@example.org) for a list of comps.
2. See what you can afford
Use the mortgage calculator in the sidebar to the right to see what your payment would be. To get a sense of the maximum you should spend, measure this amount against your budget.
3. Find out what your total monthly housing cost would be…
…including taxes and homeowners insurance. For an idea of what you’ll pay in taxes send me a quick email or take a look at the public records that are usually posted online on the local government website.
4. Find out how much you’ll likely pay in closing costs
The upfront cost of settling on your home shouldn’t be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees
5. Budget inspection
Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor.
6. Remember to look at the big picture
Buying a house is a great way to build wealth, but maintaining your investment can be labor-intensive and sometimes expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, make sure you have a plan, do not rush trying to find plumbers last minute, a good selection can save you a lot of money, the right plumbing contractors will know exactly what to do.
7. Consult with a professional
Let’s talk about the real-estate climate. Will prices continue falling, has your area hit bottom, if so will it begin to bounce back soon?
Ready to take the plunge? If you have any questions along the way, Clay can help steer you in the right direction. For a FREE Home Buyer’s Guide you can print click here.