Published on February 28th, 2013 | by admin0
Tips to Stay Out of Debt When Buying a House
Apart from the debt of taking out a mortgage, there are many other debt traps one can fall into when buying a house. Your parents might be able to share some of their wisdom, but one thing they will say is that they did not go into debt the way the current home-buying generation does. Some of the reason has to do with economic situations outside of people’s control, but there are factors you do have control over.
The very first thing to consider is whether or not you can afford the house you are about to buy. Although you would be turned down for a mortgage if the lender believed you did not have the income or positive credit history a bank was looking for, there are certain factors you need to satisfy for yourself.
For example, what are your plans for the next few years? Are you going to expand your family? Is the job you are in relatively secure? Is there any margin left over for economic pressures (emergency medical bills, renovations)? Do not back yourself up against a wall by leaving nothing in the bank every month.
Keep all of your upcoming bills in mind and create a budget before even entering the real estate market. Plan how much you can afford to spend on utilities, what your outgoings will be in regard to car payments, filling it with gas, recreation, groceries and so on. It will soon become clear (if you are honest with your list) that a certain mortgage is too much right now. Save for a little while longer, or wait until the next pay rise comes along.
Cost of Living in a Home
You might be accustomed to paying a certain amount to heat a small home, basement suite, or apartment, but a house is a whole other matter. Now you have to heat a much bigger space, or cool that space during summer. Then there are lights to consider. The more you have, the more you seem to leave on. Gas and electricity bills can come as a surprise.
Perhaps you plan to install some kind of alternative energy system to mitigate costs. Get the estimate done first rather than assuming you are at a feasible sight for solar thermal or PV collection, both of which would save you money.
Rather than being surprised about energy costs, talk to the home seller in person or through your real estate agent about how much it costs to light and heat this house. If they like rooms to be about the same temperature as you have them, you can be pretty sure that heating a home twice the square footage of your current abode is going to be costly.
Cost of Furnishing a Home
When moving from a small place to a bigger one, the tendency is to want to fill that space. Your furnishings were ample back at the apartment, but now there are whole rooms that are going to go empty until you can afford to furnish them. Keep this in mind when you plan your budget.
Your home is likely to be the biggest expense of your life. Take your time and plan to live there for many years. Have patience. Fill the rooms at the pace you can afford, not the pace our desires dictates.
Ready to Live In?
Is the home you have in mind ready to live in? Are you going to have to pull up carpets within the year or replace leaking roof tiles? It is best to find out how much these kinds of repairs and improvements will cost, not just pretend you can put them off.
Author Bio: Alex Wright is a writer who creates informative articles related to the field of real estate. In this article, he offers financial tips to individuals buying property and aims to encourage further study with a Real Estate Degree Online.