PURCHASING A NEW HOME? THINGS TO NOTE

One of the basic amenities of life is Shelter. Thus acquiring a home could easily be one of the most important financial decisions or biggest investments one could ever make. Hence adequate diligence is required towards purchasing what would be the right home that meets your needs, budget, and general living. Otherwise, you may find yourself in a financial quagmire that is beyond you. 

So, before you punch in those numbers for that home, here are the necessary and important points you must check. 

• How much house can you afford? 

According to an American personal finance company, Nerdwallet, the 28%/36% rule should be adopted when purchasing a home. This rule dictates that one never spend more than 28% of their monthly gross income on home-related costs and 36% on total debts. 

Before you go on that house hunting, make sure to take some time to put into consideration, your daily, monthly, and annual expenses, debts if any, and overall income, because, granted the banks might agree to sign you up for a huge mortgage, but that is the easy part, the difficult and real question is if you can be able to comfortably afford it. Put into consideration other things like monthly retirement savings, education, and long-term financial aspirations. 

• What type of mortgage should you get? 

Well, you must take note of what type of mortgage you would need when going for a home loan to buy a home. 

Some of the mortgages to ruminate over are government-backed mortgages as against conventional mortgages, and adjustable-rate mortgages against the fixed-rate mortgage. 

There are a few factors to bear in mind here, such as your credit score, the location of the home, the length of stay time planned, and interest from other buyers. 

• What are the closing costs involved in the sale? Don’t forget to consider the closing cost involved in the sale of a home. Try to get value for your money. 

• How much do utilities cost monthly? 

While considering buying a home, make sure to ask very relevant and important questions concerning the property. Questions regarding the monthly costs of electricity, water, gas, etc. should be enquired from the seller. The general utility cost and know if they are the things you can afford. Because, typically, the larger the home, the more costly to heat and cool. And certain facilities like bathtubs and swimming pools also tend to incur more monthly water bills. All these are things you should find out from the seller before purchasing a home. 

• How long do you plan to live in the home? 

This is where your long-term or short-term living plans come in. Are you planning to live there for a long time, or just a short-while arrangement? If you plan to live in the home for life, or at least for a very long time, then you wouldn’t mind going for a big budget for it. However, if the plan is just for a few years, say two to four years, then doesn’t make sense to break the bank for it. So, let your budget be determined by how long you plan to live in the home. Don’t forget, if you are going for short-term homes, make sure they have good resale value. 

• What are the property taxes? 

Essentially, the percentage of a home’s worth is property tax. Most infrastructures, roads, public transportation, and schools are more or less paid by property taxes. It could be quite high, or very low, depending on the location of the property. So it’s very important that you enquire about the property of the home you planning to buy from the sellers, otherwise, you might find yourself locked in a pretty high bill. 

• Good resale value? 

This is categorically a very important factor to consider, especially if you have short-term plans to live in the home. Therefore, it’s very paramount that you consider if the home has good resale value. There are a few pointers to look out for to know a home that has good resale value, such as; the price, and comparable sales, are there local schools around? Location, and condition of the home. It would amount to a bad investment to splash money on a home that you can’t subsequently resell whenever you want to. 

• How good is the location? 

The location of the property is another critical factor. It plays a very vital role when deciding what home to purchase. A home situated in a good area where amenities abound, with good schools around and relatively safe, tends to have quite a high resale value, and it would be an area worth living in. There are a few things you should look out for in the form of red flags when considering the location of the home you want to buy. 

- Is the home located in a noisy area or highway 

- Is it an area with bad schools 

- Is the area full of businesses and people 

• What kind of Neighbors are there? 

The community or the surrounding neighbors where the home is located plays a major role if you are going to feel quite at home or not. Don’t be so carried away with the aesthetics and structure of the home that you forget about what your actual next-door neighbors look like. Depending on what you are looking out for, a neighborhood with families and lots of kids, or bachelor neighborhood, or even an older and retired one. These are things you have to check before buying a home. 

• Is the house in good condition? 

It is quite pertinent to state that, before you purchase any home, make sure you go for a house inspection of the property. And use that opportunity to check the general condition of the home. Make sure to do a thorough inspection of the home, and check for everything from the HVAC unit to the plumbing set-ups, even the electrical wirings, and the roof conditions- you don’t want to buy a home with a leaking roof and all. Find out how old the facilities and systems are, and when last they were replaced.