Have you been thinking about buying your first home? You’ve probably heard all sorts of conflicting advice. But the truth is that there are a few important things to consider when deciding whether or not to buy real estate in this market.
What will happen if interest rates rise and prices drop? What if property values go down and I can’t sell my house for what I owe on it? What if we lose our jobs and we don’t have any income coming in, what then? These are just some of the many questions people ask themselves when considering buying real estate in today’s economy.
The best way to buy real estate is when you have a stable job and a steady income
This means you are able to cover your monthly mortgage payments with ease.
You need to have a down payment saved up so you can avoid paying private mortgage insurance (PMI). You should expect to pay between 3% and 20% of the purchase price as a down payment for your first home.
Make sure that there are no major flaws in the house or neighborhood
Buying a house that has some major flaws can be just as bad for you as not buying real estate at all, so be sure to hire an inspector to look over the entire house before signing on the dotted line.
Be prepared for sudden financial problems by saving up money for emergencies
Property taxes, broken appliances, and erosion can all turn your home into a financial nightmare if you are not prepared.
You need to make sure that you have an adequate savings account set aside in case anything happens to your job or any other income source. Sometimes it is enough to just cut back on your expenses by eating out less often and canceling unnecessary memberships like gym subscriptions.
Don’t forget about taxes and fees
The amount of taxes and fees you pay can often be as much as 10% of your total purchase price. Make sure to read the fine print on any real estate contracts before signing them. You may even want to use a local accountant or lawyer for this so you know that you’re not getting ripped off by someone trying to make an extra buck on legal loopholes.
They usually charge a pretty small fee, but it can really save you some headaches down the road.
Never sign anything without reading over every detail carefully
Make sure you don’t sign anything unless you’ve gotten all of your questions answered. Never trust a “salesperson” trying to pressure you into signing something that you aren’t 100% sure about.
Sometimes, the best thing to do is walk away from a deal if there’s one part of it that doesn’t sit well with you. There will always be another property, and another opportunity for real estate investing.
Final Words
If you’re considering buying real estate in today’s economy, there are a few important things to consider. One of the most important is whether or not your job and income will allow you to cover monthly mortgage payments with ease. You also need to make sure that the property itself has no major flaws before signing on the dotted line, as well as having an emergency savings fund set up for any sudden financial problems that may come into play down the road like property taxes and broken appliances. Remember: never sign anything without reading over every detail carefully and if something doesn’t feel right about it – walk away from the deal; another opportunity will always be around!
