Nov 1 2016
Buying your first home will always be the biggest financial commitment you make. It takes months of searching for the perfect property, followed by weeks of form filling to get the mortgage in place. Every area of your financial life will be scrutinized, and you still may not get offered a rate that is affordable. It’s stressful, time-consuming, and hard work. But your time and energy aren’t the only things you’ll be investing in that property.
Saving up to cover that minimum ten percent of the purchase price is very hard to do for young people today. Of course, that isn’t the only upfront cost you’ll be facing. There are legal fees, removal costs, and administrative charges to cover before you get the keys to your place. Even before you’ve moved in, you’ve already paid a lot more than your deposit. Now you’ll be facing twenty-five years of interest payments on the 90% you borrowed. Is it all worth it?
Thanks to Flickr for the pic: https://flic.kr/p/iQncn8
Many would argue that having a roof over your head and that first foot on the property ladder is an investment in your future. You’ll have the freedom to change the style of your home to suit your tastes. You may even have the space to start a family. Is the home you live in a good financial investment, though? Is there any question that renting is cheaper? Unless you are making a substantial step up regarding the size of your home, it is unlikely that your rent is less than your monthly mortgage repayment. Many mortgage lenders look at this as part of your affordability checks.
Buying wisely can help you maximize your investment. Start modestly. Don’t go for a four bedroom house if you only need an apartment right now. Do your homework. Check websites like www.searchbaltimorerealestate.com regularly to see what properties are on the market. Note the prices. Pay particular attention to the ones described as immaculate or impeccable. Compare them to the ones in need of modernization or refurb. If you’re willing and financially able to do some work, you could increase the value. Check with the agent what the ceiling valuation might be. If you can improve the property enough on a tight budget, you could make just enough to move up the ladder on your next purchase.
Market prices fluctuate. It’s important to buy at the right time for prices, not just the right time for your housing needs. There are usually taxes to pay on your purchase. It’s worth keeping an eye on news that these may change. It might prompt changes in the market. Or it might encourage you to buy quickly. To make your property a good investment, keep an eye on local issues. You should be aware of political and environmental issues affecting properties you’re interested in.
Buying a cheap property that requires a lot of work may be a mistake if you’re not skilled at DIY or building work. And buying an impeccable property now doesn’t mean it will still be in that condition when you want to sell it on. As with any investment, doing your homework can help reduce your risk.