Finance Financial Considerations to Make Before Buying a House Posted on April 19, 2021 7 min read 0 5,062 Contents1 Can You Handle Financial Surprises?1.1 Although home insurance can help with some of this, are you financially capable of handling the rest of it?1.2 What Will You Do If You Can’t Pay for a Month?1.3 How Much of Your Income Does It Take?1.4 Do You Think You’ll Stay Long? When buying a house, many try to plan for every detail and figure out what to expect. Unfortunately, finances aren’t always easy to predict. While marking off your steps to buy a house, you must think over each of these questions and consider whether purchasing a home is the best plan for you. Can You Handle Financial Surprises? Do you have money saved up? If not, think about what expenses might pop up while you own a home. A storm could cause your roof to leak, or a flood might make part of your home unusable until it’s dried out and the drywall is replaced. Although home insurance can help with some of this, are you financially capable of handling the rest of it? Saving ten to twenty percent of your paychecks is a great way to ensure you have money set aside to keep you safe and living stress-free. Although it’s good to be still able to spend money and have fun, savings is vital to staying afloat as a homeowner. What Will You Do If You Can’t Pay for a Month? Everyone buying a home must take a moment to seriously consider what they’ll do if their financial situation changes. Although everyone assumes they’ll be fine and that their jobs will stay steady and they’ll stay with their spouse: unfortunately, things can change. Do you have family or loved ones who would be able and willing to help you if you ended up short a month? Is your job the type where you could find more work if you needed it? Consider these carefully before moving forward. READ Why Every Home Buyer should Consider Home LoanHow Much of Your Income Does It Take? If you’re looking at homes that would have monthly payments of $1,200 a month, is that something you can afford? Although you may initially say yes, think about everything else you have to buy and all of the things you enjoy spending money on. Your household may bring in $4,000 a month, which would more than triple the cost of your monthly payments: but are you okay living with just $2,800 a month? Can you afford food, car payments, entertainment, college or medical debt payments, along with the costs of keeping up your home on top of that? Do You Think You’ll Stay Long? Although many homeowners buy with the intent to sell within the next five to ten years, it’s essential to consider your options. If you live in an area in a buyers’ market, where the costs of homes are meager right now, it might be okay to make a shorter investment in buying a home. If the houses in the area are in the sellers’ favor, though, you could be facing losses if you try to sell them down the road. If you’re planning on making this house into your forever home, then the investment in the property doesn’t have to be that big of a deal. Just make sure that you plan out by at least ten years to see what to expect.
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