Whether you’re considering purchasing your first place or you’ve bought and sold multiple properties, there are definitely things you didn’t know about owning a home that you learn along the way. Let’s take a look at these little-known home buying facts.
1. Having a Mortgage Will Strengthen Your Credit
Taking on a mortgage and making your payments on time can do wonders for your credit rating. Showing that you’re able to consistently pay off a large sum shows lenders that you are credit-worthy and reliable.
2. It Pays To Save for a Down Payment
Not only will the money help lower your monthly mortgage payment, it can also help you pay off your mortgage faster.
3. Your Mortgage Payment Is Just the Beginning
When your budgeting to buy a house, looking at estimated mortgage payments is a good baseline. However, you also need to consider additional monthly costs like HOA fees, ongoing maintenance costs like pool service, utility costs and so on to get a better idea of what you’ll really be spending.
4. Unexpected Issues Can Pop up at Any Time
Inspections are so important to the home buying process because you want to encounter as few maintenance issues as possible once you move in. However, as any homeowner will tell you, there’s always something on the property that needs fixing. Consider the age of the home and all it’s major systems before you buy to make sure you don’t get into anything you can’t handle financially.
5. Emotions Can Lead You Astray
You may fall in love with a property, but you could end up in a financial bind if you purchase a house that you can’t afford. Run the numbers again and plug costs into your monthly budget to make sure you have the means to live comfortably before making an offer. If it’s not in the cards, you may have to prioritize things on your wish list and settle for a compromise.
6. A Dual Mortgage May Not Be Your Best Option
It’s common for spouses and siblings to go in on a mortgage together, but sometimes it can actually make more financial sense to keep the mortgage in just one person’s name. Talk to an experienced lender to learn about all your options before you decide what your best route will be.
7. Consider How Much Your Family May Grow
When you’re single, you may assume a cozy one-bedroom bungalow is the ideal property choice. However, if you plan to one day get married and have children or if you think your parents will eventually be living with you, it makes sense to take those things into consideration before you invest in a new home.
8. Save Money With Cash Back Plans
For most people, a home purchase is the most expensive purchase they will ever make. And moving in is expensive, since you’ll find that you need new furniture or need to replace old décor that just doesn’t fit.
9. Learn the Area’s Development Plans
Before buying a home, find out if any major developments are in the works for the area that could affect home property values. Cities and business do lots of research before they pick a new place to build. Learning how to spot an area that’s up and coming can help you build equity faster and make wiser investment choices.
10. Check Out the Schools
Whether or not you have kids, you should research the schools in the area. A highly regarded school system will increase home prices and will help you build equity faster.
11. You Can Reduce Your Mortgage Interest
if you lower your balance by consistently making mortgage payments above the minimum or by making more than one mortgage payment a month, you can quickly reduce the amount of interest you owe.
You can also purchase mortgage points (or discount points), which will reduce your interest payment for an upfront cost.