The real estate market is rapidly growing. The market’s current size is valued at a staggering $16 trillion, with still lots of space to grow. In addition to this, prices of homes have increased in the previous year. It was reported that the average price for existing homes increased by 11.4%, bringing their average costs to $310,000, despite the pandemic. This news brings a sense of urgency to future homeowners as they scramble to look for the right house for them.
This could easily catch you unaware if you don’t know the essentials of purchasing a property. Although the real estate market can be stable at times, it can also be quite volatile. You should note a couple of things before you buy the first house for your family as it can make a difference in how much you lose on your investment.
Refinancing Your Mortgage
Many families are not aware that they can refinance their mortgage so that they can get better deals out of them. Those who are aware are too scared to do it, thinking that they would have to pay it off for the rest of their lives. This isn’t entirely the case.
Refinancing your mortgage is an act of getting a new loan on top of your old one. This act can get you a better and more flexible deal than your previous loan. You can get a lower payment rate, a higher credit score, or even get cash out of your mortgage. This means if you got a good mortgage rate, you should consider refinancing it, especially at a time when there is a fall in interest rates. Keeping your eye on the real estate market can keep you informed when there is a change in interest rates. This can make you make up your mind if you want to refinance your mortgage or not.
Extensions
Homes with a patio or a greenhouse in their backyard will always be appealing to most consumers. However, take caution in buying these houses because those extensions inflate the property value of a home.
Extensions are always a great thing to have. It’s like getting a freebie when you buy a product from a retailer. However, this isn’t the case for real estate. Extensions that aren’t built alongside the house can inflate the value of a particular property. This is a tactic done by some homeowners who were planning to sell the house in the first place. By buying a home with a given extension, you could easily pay double the asking price of a typical house in the market.
Additionally, you might not even need the extension at all. Some of them are just for aesthetic purposes. Some can even be poorly made.
Before buying a home with an extension, make sure that the extension was built alongside the home and not when the previous homeowner bought it. This means that the price you’re going to get is not inflated by the unnecessary accessories that came alongside it.
Buying a House for Tomorrow
Don’t buy a house with the standards of living you have today. Getting a home requires some foresight into your future. This involves a lot of planning and strategizing, but don’t overthink it either.
Take your time to plan out the possible avenues of your career. It’s also important to imagine how you are going to pay for your mortgage.
Get a calendar and start marking days when you will pay for your mortgage and see whether you can afford it with your current plan. If not, there’s always time to make a new one. Rushing into buying a house can only be trouble for you in the near future.
Remember that life changes over time, and if you don’t have kids now, you might have kids a couple of years down the line. If you bought a house that cannot shelter these kids, then that’s a new investment you have to start looking for. Additionally, you also have to think about whether if you’re planning to stay in that particular area. If your career requires you to move around, consider not buying a house as yet.
Only buy a home when you’re willing to settle at someplace.
Ultimately, buying a home or any property is a considerable investment. Given the current market, the prices of homes and interest rates are relatively high. However, there is still a chance that it would go down in the near future. Keeping track of the market changes can be helpful when you’re planning to buy a home. It’s also beneficial when you’re planning to invest in one in the future. So keep these things in mind before you buy your first home. It can be a life-defining experience that you can’t take back in the future.
