The home buying process can be a heady time for those who have found the perfect place, especially if you're a first time home buyer. From choosing a the right real estate agent to purchasing new furnishings, new homeowners can get great enjoyment out of fixing up the place. However, homeownership is serious business, and you could find yourself spending an inordinate amount of money if you’re not careful.
How To Protect Your Finances When Buying A Home
The way the home buying process is usually advertised to interested consumers places the perfect smiling couple, in front of any one of the display homes in Sydney or another city as they enter their first property. Behind the smiles and the excitement is the hidden process of purchasing property, which can take several months, and by the time of closing, you feel like you have just finished a course on real estate. Furthermore, protecting your finances from the million little assaults that can happen whilst buying a home is a top priority.
Continue reading for more information about how best to protect your finances whilst buying a home.
One of the best ways to guard against being taken advantage of is to invest in an inspection of the property of your choice before signing a purchasing contract. Typically, most housing inspections happen after the purchaser has signed a contract. At this point, you have already signed a good faith contract that commits you to the property, so anything that comes up askew in the home is your responsibility once purchased.
A word of caution for those looking to purchase property, is to budget money, to have an independent inspection completed on any prospective home before signing any form of contract. This is because the inspector can immediately identify problems with the home, and thereby, prevent you from spending extra money.
Contingency Clauses And Disclosures
Consider contingency clauses as a part of the contract for buying the home. Simply stated, a contingency clause stipulates if certain conditions in the home are not met, then the buyer or seller can cancel the contract. For example, common contingency clauses relate to things like inspections, where a homeowner can cancel a contract for damages to the property.
Moreover, disclosures operate in the same way by alerting the buyer of the property’s defects. When purchasing a home, find out what the disclosures are before committing to the property. Both contingency clauses and disclosures can help homeowners safeguard their money.
Get The Best Rate
When shopping for a loan, consider a number of funding sources that can help you lock in the best rate. While many simply go to traditional financial institutions like banks, credit unions and online financial advisors. Other financial institutions can also provide you with competitive rates as well. Over the long run, lower interest rates will keep your payment low and prevent you from spending more over the life of the loan.
To prevent yourself from buying more house than you can afford, consider seeking a pre-approval letter. Prospective home buyers go through the same process they would in applying for a loan, but the pre-approval places a limit on the amount of money they have to spend. In essence, this tool can prevent overspending.
It goes without saying that when purchasing property prospective buyers should avoid taking on any additional debt. Buying a home is one of the biggest purchases you can make, and at any time in the process, you can find yourself needing to draw from large sums of cash. One way to protect your money is to avoid taking on any extra debt that might compromise your ability to afford the home.
Protect Your Investment
At some point, that huge stash you have set aside is invested in the home of your dreams. To protect this investment, buyers can take some measures that prevent them from overspending or being taken advantage of. Ultimately, the goal is to walk into your new place without suffering from costs that dampen the whole experience.
If you're a first time home buyer, it's probably a good idea to heed the advice of seasoned professionals. Check out this infographic to learn about nine things first time home buyers don't realize they should do:
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