Owning a home can bring pride and freedom to you as a Home Owner. For first time Home Owners here are things to keep in mind when doing so and that you might thank me for in the future.
1. Eliminate Debt
Before considering of purchasing a house. Make sure to swipe off your debts first, college debts, credit card debts and etc. This will help you bring peace of mind knowing that the only thing you'll be paying for is your house and no other debts on the side.
2. Save up to 6 - 20% of Downpayment
When pulling out a big chunk of money for your downpayment, you can't just empty your bank and leave other expenses like closing cost to credit card. So, before putting that huge amount of money on the table, make sure you have atleast 6% - 20% of that amount left in your bank for insurance, remodeling or rennovation purposes.
3. Plan your Monthly Payment
Plan how you are going to pay for your Home purchase balance. In this way, you get to picture out how your purchasing habit is going to change. How you will cut-off some of your unnecessary expenses and align with the thinking that your salary has a place to be before you even get it. So keep that in mind to avoid lapses. (If not, it may eventually lead to a bad credit score)
4. Pre-save at least 2% for your Closing Cost
Closing costs are fees and expenses you pay when you close on your house, beyond the down payment. These costs can run 3 to 5 percent of the loan amount and may include title insurance, attorney fees, appraisals, taxes and more. Aside from paying the property itself, you also have to pay it's closing cost for legal & safety purposes.
5. Expect for Housing Expenses
Common mistakes of new homeowner is not expecting for the following Housing Expenses. Similar to purchasing a car. When buying a car, you are agreeing to take good care of it for as long as you're using it. You have a yearly oil change, property tax, utilities, furnitures and other miscallaneous fees. So make sure, when buying a home your pocket is still as deep when you paid your downpayment.
6. Moving Cost
Similar to tip number 5, your pocket has be deep after making your first downpayment becasue you all these other expenses you will not expect to end up paying more than the downpayment. Purchases like Air Conditioning unit, Heater, Stove and all these other appliances you need to have to make your house livable.
Amidst all these hassle process of owning a home, the satisfaction you get when you see your family safe and happy in it, will all be worth it.