Building a secure financial future where you can live in comfort and retire on time is, for the most part, a matter of doing the small things right over and over again.
Every day, you’ll have to make the decision to stick to your budget; every day, you’ll work and earn more money. You’ll save, invest, and plan carefully for the future. But sometimes, big moments come along that will change your financial future drastically.
Perhaps the strongest example of this is buying a home. Here’s what you need to know about the choice to buy, getting the right deal, and preserving your investment.
Should you buy your home?
The first financial question that comes with a potential home purchase is the overarching one: does it even make sense to buy a home in the first place?
Conventional wisdom says yes, and it’s pretty easy to see why. When you buy a home, you will almost certainly take out a mortgage. After the down payment, you’ll be paying monthly — not just for your living space that month, of course, but toward your eventual full ownership of the house.
Compare that to renting, in which you still have to pay every month (and often a comparable amount), but don’t actually get to keep your own home, and it’s obvious why buying a home is traditionally understood to be the better bargain.
Still, there are some downsides to home ownership. Closing costs can be pricey, effectively offsetting the savings you get from buying for years’ worth of mortgage payments. If you’re not planning to live in your home for more than a few years, then buying might not be the right call.
You also, of course, have to think about what you can afford. Will you be able to cover the down payment while still having enough cash left for your emergency fund, long-term savings, and retirement?
Getting the right deal
If you do feel that it’s time to buy your home, a new problem quickly emerges: how much should you spend? It’s important to take a clear-eyed look at your financial situation and determine exactly how much house you can afford.
Of course, how much house you can get for the same amount of money will depend on prices in your area, as well as on the rates you can get on your home loan. Use a home loan calculator to figure out the right deal for you, and get pre-approved for a home loan before you start looking. This way, you can move quickly if you find your dream home on the open market.
Protecting your investment
Once your home is yours, you’ll be paying into a mortgage and be in possession of a very valuable asset. But if you want your home to keep its value and ideally grow in value, then you need to care for it.
Protect yourself from financial ruin in the event of the unexpected or inevitable by investing in homeowners insurance, and protect yourself from the expected by investing in maintenance. You need to be taking care of seasonal maintenance and checking up on things like your house’s foundation too. And don’t forget about the systems that keep your home comfortable, like your HVAC system, electrical system, and plumbing system.
It takes a lot to keep these systems running — and to keep your house safe, explain the experts at Corbin Electrical Services in Marlboro, NJ. Faulty electrical systems and bad plumbing can be disastrous for your house, not to mention the people who live in it. It’s important to keep up with routine maintenance and to make repairs quickly.
Ideally, you should be focused on preventative maintenance. If you can stop problems before they happen, you won’t just protect your home and your family — you’ll also save money, because maintenance tends to be cheaper than repair work. Put off maintenance and repairs, by contrast, and you’ll end up with a steeper bill later on. It’s just one more way in which the home you own can affect your financial future.
