Buying a new home is a huge decision and takes a lot of financial planning and saving before the purchase can actually be made. But there are many people who suggest you do certain things before buying, yet never consider long-term planning as one of those tips. The key is to start early and be smart, which will help you save money and be stable in the future.
We’re going to share two very important things that should be done before buying that dream home. You’ll be glad you did and feel better in the long run.
- Do you really need all that square footage?
When you look around your space now, do you imagine all of that stuff traveling with you to the new house? Do you have a storage unit you’ve been trying to empty and find space for?
Before you decide on a certain size of home, go through your closets, storage units and attics / basements. Toss, sell or donate everything that is not used or necessary, and then reassess your belongings.
If you removed a substantial amount, it is probably a sign that you need less space than you think. You’ll have some extra money from selling items and moving fees will be less expensive, with are both great financial savings for the future.
- Save for longer than just a few months.
So you’ve crunched the numbers and have decided that you can afford to pay the mortgage. Can you also afford insurance, taxes, repairs and all other expenses?
It’s easy to forget that more is needed than initially thought, so a good rule of thumb is to add the mortgage payment plus 50% of the payment. You’ll be getting a good estimate for how much it will cost to upkeep the house and all the small bits with it.
Try saving substantial amounts over a long period of time. If possible, 1 to 2 years of saving will get you a good starting amount so that you don’t have to worry for the first year of home ownership. You’ll have new responsibilities and less spending money, so having the backup fund will be critical for success.
When you are ready for that first step into home ownership, be sure you’ve gotten through all the necessary prep work to make the whole process a positive one.
Any tips to add? Let us know in the comments below!