Financing a home is a big deal. In fact, acquiring a new home could likely be the largest investment you make in your entire life. So it’s not something to take lightly. Here are a few things you should strongly consider before financing that new house.
- Your budget— There’s a reason foreclosure statistics have been so high in the last few years. People took on much bigger loans than they could handle. That said, before you even dream of taking on a Florida mortgage, you need to take a long, hard look at your budget. And when doing so, be realistic. Take into consideration worst case scenarios. And ask yourself, can I really afford this mortgage payment each month? If things are too tight, you might reconsider taking on the new loan. You don’t want to become a statistic.
- How long you plan on staying—Do you really want to take out a mortgage on a home you only plan on living in for a year or two? Probably not. The home buying process is a lot of work. All negotiating aside, just the finance process alone is enough to make the inexperienced buyer pull their hair out. Getting approvals, pulling all the paper work together… it’s stressful. However, keep in mind that a good mortgage company can help take some of the stress of your shoulders. But still, it’s a good idea to only finance a home if you plan on staying there for at least 5 years.
- Interest rates—If you don’t know much about loans, you may find yourself not understanding how much money you’re really paying. It’s important to pay attention to what Florida mortgage rate you’re receiving, not to mention making sure that you get the lowest one possible. Depending on the length of your mortgage, you’ll find that having a high interest rate will cause you to pay up to 3 or 4 times the actual price of your home in the long run.
- If you should really go new—How important is having a brand new home to you? Would a home that is a bit older be a better financial decision for you? It could decrease the amount of your mortgage. And depending on the area of the pre-owned home you’re looking at, taxes and homeowner’s fees may be less as well. Of course, there can be down sides to going pre-owned as well. For instance, finding the wrong home could mean lots of renovation work. Which equals more time and more money.
Remember, financing a home is no small undertaking. It takes planning, commitment, and patience. Make sure you consider all of the above before jumping in head first. Once you’re sure you are ready, you’ll enjoy your new home even more.