Purchasing a brand-new home requires an abundance of forethought. Of all the things you must consider in the home-buying process, arguably, the most important is finances. Without appropriate financial preparedness, every other facet of your planning process is nearly irrelevant. You must be sure that you will be able to afford your homeeven afteryou’ve made the down payment and closed on the deal. That certainty requires a thorough examination of your economic capacity now and in the future. To assist you in reaching that point of confidence, ask yourself these questions below, provided by Rex Homes, as you prepare to buy a brand-new home.
- What is A Good Budget?
Before you get started on putting money away for a down payment and future home-related expenses, you will need to have a clear goal in mind. For this, you’ll have to determine the best budget for your financial capabilities. Keep in mind that, as you’re establishing your budget, the down payment and mortgage are not the only elements that will be contributing to your home expenses. Remember to include the following in your budget:
- Property taxes
- Home insurance
- Maintenance and repair
- Is it Better to Buy a New or Old Property?
The value of a home and its assets falls over time, and not all components in older homes adhere to residential standards and codes in place today. On the other hand, it may not be feasible for you to purchase a brand-new home at the moment, so considering an old house for renovation might be the cheaper option. Carefully weigh this decision will all possible caveats in mind.
- How Do Repairs and Renovations Differ?
This is especially important for those shoppers looking to purchase an older home. Of course, this is not to say that newer homes will not need either renovations or repairs, but these costs are likely to be more extensive in older structures. Replacing a broken window may be considered a renovation. In contrast, the repair of the home’s electrical wiring is likely to be considered a repair. The two come with different costs and unique requirements for permits, so know this information well ahead of your purchase.
- Am I Prepared for the Costs of Maintenance and Repairs?
Again, this is critical to ensuring you have a thorough, well-informed perspective on what to expect when purchasing a brand-new home. Your budget should have room for surprise repairs. Since you’re no longer renting, you will now be responsible for all necessary repairs your house may need. Saving about 1-2% of the home’s asking price is a safe way to give yourself the funds required for future maintenance and repair costs.
- What is the Best Type of Ownership?
There are five different options to choose from when deciding whose name the new home should be registered under:
- Sole ownership
- Joint tenancy
- Tenants by entirety
- Tenancy in common
- Community property
Each come with their own advantages and drawbacks, and may influence the ease with which problems are resolved with your home, should they ever arise.
As you prepare to purchase a brand-new home, get the help of a highly-experienced mortgage professional. They will walk you through all the critical factors to consider before beginning the home buying process to ensure you get exactly what you’re looking for at a price that best suits you.