| Hi Taylor:
My husband and I are looking to buy a house, but we can't agree on
how much we have to spend. We've got money saved up, but we're struggling
to see the big picture and make the best choice based on what we have.
Little help? - Sarah
Hi Sarah: Those big decisions never come about easily, do they?
I'm sure you and your husband will make the right choice, and hopefully,
I'll be able to offer a little guidance. I'll list a few factors that
you should be considering before making a bid on any property.
down payment. The last thing you want to do is dip into your
emergency savings and put yourself in dire straits. Of course,
a bigger down payment will reduce your financial stress going
forward. Unfortunately, it isn't always easy to know how much
you can realistically pay upfront. Prospective home buyers have
to fully understand the terms of their mortgage and how that payment
structure will work. You also need to factor in the closing costs,
inspection fees, and all the other fees that come with home buying.
In short, you really need to crunch the numbers in order to get
a good idea of what you can afford to pay upfront.
2. Long or short term? How long do you plan to live in this
house? If it's forever, that makes a mortgage more sensible. If
you're buying a house because you hate paying rent, but you aren't
quite sure you want to stay in your current job or city for much
longer, you should really be careful. I fully support flipping
houses and buying investment properties, but that has to be your
objective from the get-go; you can't just assume you're going
to get your money back on any house you buy. Make sure you and
your husband are on the same page regarding your long-term plans
before signing contracts and forking over money to realtors.
3. Upcoming expenses and current debts. You can't prioritize
buying a home overpaying other debts. For starters, that's a surefire
way to put yourself into an endless, painful spiral of debt. In
addition to that mess, you probably won't get a great rate on
your mortgage if you have a lot of other financial obligations.
If you're still paying off student loans or credit cards, you
better have a significant amount of money stashed away before
trying to buy a new home.
| Look at your
situation very closely. When you have a good understanding of your
immediate and future finances and goals, the house-buying process
will become a lot more clear. If you have some cash saved up and a
clear plan for the future, you two will be moving into a nice home
in no time.
© Taylor Kovar
May 25, 2022
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an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
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