Buying a home can be a fun experience but it can also be overwhelming. Properly preparing can alleviate stress, save time and money, and make the entire process smoother. Below are some of the most important steps to take before you get started.
Know Your Budget: Understand what you can afford to ensure your home fits into your overall financial picture. Do not forget to take things like insurance, association fees, and property taxes into account. It is also important to not just have a maximum budget, but to stick to it!
Review Your Credit: Make sure you are in the best position to get a good interest rate if you need a mortgage and take any steps you can to improve your score. If anything is incorrect, call the credit bureau and ask how you can get it fixed.
Decide on Funding: Figure out where the funds will come from and any potential tax implications. If you need money from your investment portfolio, communicate early with your advisor to ensure they are part of the plan. Waiting until the last minute will add additional stress and could increase costs unnecessarily.
Save More if Needed: Make sure you will have enough cash after closing to manage any emergencies, moving costs, renovations, or unexpected maintenance costs. We recommend three to six months of expenses in the bank as an emergency fund, but with a new home purchase, you may want to increase your savings in the short term.
Speak to a Professional: An experienced real estate professional will know the local market, help with negotiations, identify red flags, coordinate timelines, and review contracts. Not all personalities mesh well so it is good to interview a few and make sure you feel comfortable with whoever you choose to work with.
If you are considering purchasing a home, we recommend ensuring it fits into your overall financial plan. Reach out to schedule a conversation with an advisor today.
This Commentary is provided by Spraker West Wealth Management, a registered investment advisor, and is for informational purposes only. It should not be construed as investment advice and is not intended as a solicitation of any specific product or service. Investments and/or investment strategies include risk including the possible loss of principal. There is no assurance that any investment strategy will achieve its objectives. Information provided is not intended as tax or legal advice and should not be relied upon as such. You are encouraged to seek tax or legal advice from a qualified professional.