Buying a home can be a thrilling, exciting new chapter in your life, as well as being a sound investment. Buying a home is a major financial step. But if you don’t do some critical things beforehand, it can be a long-term financial albatross around your neck. That’s why we want you to take a careful look at these 5 things to do before buying a home in Lake Forest Park, WA.
Determine Whether You Can Really Afford All the Costs
The very first thing you should do before buying a home in Lake Forest Park, WA is to determine whether you can really afford all the costs of homeownership. I’d say the very first thing that you want to do when buying a home is really understand the value of that home. There is, after all, a lot more involved than the purchase price.
In addition to mortgage payments, property taxes, homeowner’s insurance, and (perhaps) homeowner’s association fees, there are all those inevitable maintenance and repair costs. To cover all this, financial experts recommend that you set aside every year at least one percent of your home’s sale price to cover maintenance and repairs. So if you purchase your new home for $100,000, you’ll need to put back at least $1,000 every year. You may go a few years without having to spend any of it, but there will come a time when some major goes wrong, and you’ll need it.
Work on Credit Score and Get Pre-Approved
Because a higher credit score will get you better financing deals, working on your credit score is the next thing to do before buying a home in Lake Forest Park, WA. If, for example, your score is below 660 or 680, you’ll have to pay higher fees and come up with a much larger down payment. Ideally, you want to get your score up to 720 or higher.
Then, before you start house hunting, you should get pre-approved for financing. Doing so lets you know how much house you can afford ahead of time. It also tells sellers that you are a serious buyer and gives you more negotiating leverage.
Determine Whether Buying a Home Is Actually a Good Investment
No matter how much you fall in love with a certain home, it should also be a good investment. This means that you need to set aside emotional considerations and make some rational decisions before entering into the largest financial transaction of your life. That is, you need to determine whether the home you’re considering is actually a good investment for you.
There are many reasons owning a home is important, and most of them stem from the fact that a home is an asset, and paying a mortgage increases your equity in that asset, which is better than paying rent.
There are two prime considerations here. Is the home located in an area where, historically, property values increase over time? Will there be, now or in the future, any major repair or renovation costs? If you get the right answers to these questions and you can buy the home at a reasonable price, then it is probably a good investment.
Consider How Long You Intend to Live There
A final thing you need to do before buying a home in Lake Forest Park, WA is to carefully consider how long you intend to live in the home. A house is not a very liquid asset, so if you don’t intend to live there for several years, maybe you should consider other options.
Real estate experts agree that you should intend to live in a home for a minimum of five years. That allows enough time for the property to increase in value. Then, if you do decide to sell, you’ll be more likely to recover the costs of the transaction.
Have you done the critical research and planning, keeping in mind these 5 things to do before buying a home in Lake Forest Park, WA? If you have, then you’re ready to buy that home and start your new life. And we have the experience and expertise to help you achieve your dreams.