A house is a major life purchase for most people. Unfortunately, it’s also often an emotional decision with some first-time home buyers. The result? The home that’s supposed to give them security ends up being a major source of financial struggle, ultimately hurting their financial goals and forcing them to pay mortgage well into their retirement years.
Don’t make the same mistake. As a financial guru once said, you should own your house—not let it own you. Here are some financial tips to keep in mind before buying a property. They are suitable for first time home buyers in Denver and those who have gone down that road before.
- Have an emergency savings fund – It’s a good idea to have on hand some savings worth six months of your living expenses in a liquid emergency fund. This ensures that you can cover most of what life throws at you—such as a car problem or a dental surgery—while still being able to afford your monthly mortgage.
- Pay of all your debts – Have a balance on your credit card? You might want to pay it off before you even start looking at homes for sale in Colorado. Being debt-free will put you in a position of much less stress as you make your mortgage payments because you no longer have to worry about other monthly costs such as your auto loan, credit card debt, or student loan.
- Figure out how much you can comfortably afford – This is extremely important. A lender might say you are entitled to a bigger loan, but you don’t necessarily have to borrow that much. Buy less than you can afford if you want financial peace throughout your life. When a huge mortgage does not burden you, you can use your income to build wealth and enjoy life.
Homes are costly—one of the most expensive things most people buy in their lifetimes. Homeownership costs don’t stop at the purchase price. It also includes homeowner’s insurance, taxes, HOA fees, and maintenance costs—from repairing leaky roofs to cleaning the HVAC system. All these expenses make owning a house more expensive than renting. You have to be financially ready to reap the benefits of homeownership as a wealth-building tool truly.