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Tips on How to Control Finances when Purchasing a Home

July 28, 2016 by · Leave a Comment 

home-financial-tipsBuying a home can be difficult. Simplify it by making financially smart decisions.

Buying a home can be a tantalizing and emotionally draining experience if you are not fully prepared to take on the nuances of the entire process. Furthermore, because buyers are automatically intrigued with the property they love with such great furor, they immediately look into buying the home without much thought behind it. To avoid costly mistakes, here are some tips to make your home buying experience much smoother.

“Underwater” Mortgage Situations

When it comes to down payments, anything less than 20% will require you to take out a private mortgage insurance loan. While it may seem appealing at first, this will also increase in a lengthy and high interest loan term. In the unfortunate situation that the value of your home decreases, you will end up paying essentially more than what your home is actually worth.

Consider Mortgage Types

Before automatically taking on a 30-year mortgage term, consider whether or not it’s right for you. While it’s spread out over 30 years, you’re also going to have to pay the interest throughout that time span as well. This means that you’re going to be practically stuck with years of paying out of your pocket unless you refinance. If you can afford the monthly payments of a 15-year term, it’s highly recommended that you get the mortgage out of the way. Then, financial freedom becomes a bit more accessible and you can enjoy putting on a bit more expenditures than you normally would with a mortgage.

Kuba Jewgieniew is the head of Realty ONE Group, a real estate brokerage firm that has offices in three different states – California, Nevada, and Arizona.