One of the biggest investments some of us will make is buying a new home. Although its a major financial step to take, it’s exciting and can be a smarter decision than renting. However, there are a few important things you need to know before you sign the official papers on that house. These are just a few tips you might like to know about buying a new home for you and your family.The first thing to consider when buying a new home (especially your first house) is to get a shorter-term mortgage if you can. Whether you are shopping for mortgage loans or thinking of refinancing your current one, choose a 15-year loan over a 30-year loan. This could be a very smart financial move because you will be able to pay off your house in 15 years instead of 30 years. One major advantages of using this tip includes getting a lower interest rates—some are around half of a 30-year mortgage loan. This means you will end up paying much less over the course of your loan. A disadvantage of this may be that your monthly payments will be higher. However, some lenders off 20 or 25-year loans as other options so find the one thats right for you.
Secondly, while considering buying a new home, think about getting rid of any private mortgage insurance. It’s likely that if you paid less than 20 percent of your home’s value, you were required to have this insurance. You can get rid of it, however, by paying the full 20 percent or, in some cases, by sending a written request to your lender to cancel the PMI when you make enough payments to reach 20 percent equity. This will be a great monthly cost to get rid of and will help keep your finances under control.
Another great tip for buying a new home is to get some legal advice from a professional. Because buying a new home is such a big financial undertaking, you should have a conversation with an estate lawyer before you sign anything. Make sure they can explain your commitments and liabilities to you so that you fully understand the responsibilities you will be taking on.
Next, when you’re shopping for your home, you should also be shopping for reasonable home insurance rates. This insurance protects you from things such as theft, flooding, fire and other occurrences. First, make sure to get a plan that will cover the total loss of your house, and include an estimate of your possessions as well as that will be covered under this type of insurance. When comparing rates, look for high deductibles that will save you money over time as well as preserve insurance.
Buying your first – or your next – home is an exciting time. There are, however, a lot of things to consider before you make the big commitment. Make sure you understand your responsibilities and seek professional advice when necessary to handle this financial responsibility favorably.
