What to consider before you buy a home

Preparing to buy

What to consider before you buy a home

When we start thinking about buying a new home, the checklist of things to consider often starts out with the obvious: is the house attractive, does it have enough bedrooms, is it close to work, etc. Though all of these considerations are important, equally as important – though sometimes overlooked – are financial considerations that could make a big impact on your enjoyment of the house. Before you cast your heart on a home, take a moment’s pause over 4 not-so-apparent financial considerations.

  1. Getting pre-approved for a mortgage

    This is a great first step for any home buyer to take. Though you might have a solid estimate of what you can afford, your bank or mortgage lender will ultimately determine the upper limit of your price range, and it’s important to shop within that range to manage your own expectations. Not only that, but being pre-approved can make your offer more favourable to sellers who may be considering multiple offers (compared to offers from buyers who aren’t pre-approved), and it’ll save valuable time if you discover the perfect home and need to act fast.

  2. Doing necessary renovations or repairs

    Sometimes a house appears on the market and everything seems perfect… except for that one important room, or those windows, or maybe the wiring. When a house seems like everything you were looking for, it’s easy to imagine that you could live with certain shortcomings for a few years, or you run through the list of handy people you know (and you’re sure they’d do you a favour!). Before you let your optimism get the better of you, really consider whether you have the funds to complete major work, as it can get expensive in a hurry. If the money isn’t there, you’ll have to decide whether it’s a practical decision to take the house as-is.

  3. Making the house work for you

    Maybe you’re buying your first house, maybe you’re upgrading to a larger home, or maybe you’ve finally found that house out in the country – if it’s a big change, chances are you’ll need to buy a few things to make it functional. If all you really need is a furniture upgrade, lucky you – that can wait! But, if you need to purchase major appliances or a second vehicle, or if you think you might have a child in the next year or so, it’s important to have some funds that that aren’t tied up in mortgage payments and monthly bills.

  4. Paying the closing costs

    Before you decide to make offer, be sure to account for some of the many costs associated with closing a sale, such as appraisal fees, property and land transfer taxes, utility hookups, home insurance, and lawyer’s fees. Generally, closing costs can range from about 1.5­­ – 4% of your asking price; so, if you purchase a home for $250,000, your closing costs may range from about $4,000 – $10,000. It’s a great idea to talk about these costs with your financial institution when you’re applying for a mortgage pre-approval, as it will help you to prepare for the additional expenses.

While nobody likes to dampen the excitement in homebuyers’ eyes, it’s always better to enter into a transaction this important with eyes wide open. After all, preparing for these financial realities is likely to make the new home feel much more rewarding.

 

Originally published in the Canstar Community Newspapers on June 26th, 2017. Republished with permission. Content written by ComFree Commonsense Network.
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