Being in the position to buy your first home is undoubtedly one of the biggest milestones in a person’s life. The excitement surrounding the experience can soon be bogged down without the necessary financial preparations.
Here are 4 important financial facets to consider when buying your first home:
No.1 – Budget: have you looked further than the mortgage?
While sticking to a budget may seem like a no-brainer, there are facets of it that can easily be glossed over and ultimately leave you in a financially sticky situation.
There are so many transaction costs beyond the mortgage to consider and ensure you have the funds for. For example, transfer duty, bond registration & legal fees, just to name a few.
The key to cracking this one is to cover all your bases and to make sure that your budget accounts for all the costs involved.
No.2 – Deposit: be prepared!
Another important cost to remember is the deposit – an initial sum of money that is required to acquire the property. It is important to note that your deposit is totally separate from all other costs involved, and should be set aside accordingly.
Figuring out the various costs involved in buying your first home may seem like a daunting process and one that saps the excitement out of the experience entirely!
Buyers are not generally expected to work these things out for themselves, however, there are plenty of real estate professionals who know exactly what they’re doing and can ensure that potential buyers are fully financially prepared for what lies ahead!
While being prepared to put down a deposit on your first home is very important, it comes as part of the bigger picture – be prepared!
As important as the deposit is, there are a number of other factors and costs that need to be considered in order to ensure that you don’t end up in a financially precarious position.
No.3 – Maintenance: you never know what could happen
After going through the process of buying your first home and covering all the costs involved, it may be tempting to loosen up on how carefully you’ve treated your finances in the past months.
It is, however, imperative that you keep funds aside for consistent home upkeep and any emergencies that may crop up along the way!
You never know when something might break or become faulty and, in order to safeguard against long-term damage, it’s best to deal with the issue straight away.
New homeowners will be able to fully enjoy their new experience with the knowledge that they are financially covered, even if the worst happens.
No.4 – Insurance: set your mind at ease
Similar to being financially prepared for consistent (and unexpected) home maintenance, new homeowners must ensure that they have insurance that matches their needs.
For instance, credit life insurance is a great safeguard to put in place, as it guarantees the house will be paid off if the owner dies. This is just one example of many types of insurance and, while they all have their benefits, it is necessary to decide on which suit your living situation best.
It may not seem appealing to dampen your first buying experience with preparing for the worst, but it is undeniably necessary and will put your mind at ease instantly.
The unfortunate reality is that we have no idea what will happen, and putting financial precautions such as these in place might turn out to be invaluable in the long run.