Thinking of buying a new home? The new property could be a smart investment. But you have to play your cards right and consider a few things. These would keep you the most informed. Read ahead.
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Things To Remember Before Buying A New Property
Previous Mortgage
You may already have a home – you’re considering selling it to get cash for the new one. Unfortunately, you have a mortgage on it. The sum you get from the sale would be enough to pay the home loan off. However, banks and finance companies make you pay a penalty for breaking the mortgage early.
Depending on who you borrowed from, the penalty fee would differ. Hopefully, you did your research, as you could be stuck paying a lot of cash otherwise.
New Mortgage
Homes aren’t cheap. You can make use of the current mortgage on your home to buy the new one.
Have you heard of refinancing types? They are when banks buy out the loans you currently have. You could take out a sum larger than the mortgage, using the remaining cash to purchase the new property, or at least make the down-payment.
In general, the interest rates for refinances are lower, as the market could be more stable than when you took the original loan out. You could have a better credit score now, leading to more favorable interest rates as well.
Investment
Is the house going to be yours forever home? Although you might think it will, the chances of you upgrading in a couple of years are high. You’re advised to be smart about your purchase, and go for a home that would increase in value.
Look at the listings in suburbs. Has the price of properties in the location gone up over time? This could be due to new urban development’s coming up in the area, and more luxury homes in the neighborhood being built.
Utility Bills
Although the price of the home may not be that much, living in it could rake you up a hefty bill. Why? Because it wasn’t insulated well. The utility bills would be high.
The new property may have pests as well. Getting rid of them would require pest control, which is an additional cost.
Location
Where is the home? Think hard about its location. Not just because it might not be in an area that should be invested in, but because it’s far away from everywhere you need to be. Time is money at the end of the day.
Keep in mind how safe the area is too. If you have a big family, you don’t want to put your kids in danger. You might find a fabulous home going for a great price. This could be like the neighborhood is not that safe. So, always do your research.
Final Thoughts
Considering all the points we discussed, it’s easy to see that there are quite a few things to consider before buying a new home or a new property. So keep these tips in mind when you go house hunting.
