Real estate investing comes with many risks, including market, financial, asset-level, and credit risks. Unfortunately, many first-time homebuyers are ignorant of these risks. Yet, buying a home is perhaps, the most significant financial investment anyone can make.
The bottom line is that a home buyer should ask specific questions and receive straightforward answers about what they’re getting into before making any commitments. On that note, this article looks at some critical questions you should ask yourself before buying a house.
Can I afford to buy a house?
This is unarguably one of the most critical questions a prospective home buyer should ask themselves. It revolves around whether the individual is financially capable of taking up such a significant financial commitment. Beyond the cost of buying the home, remember to factor in property taxes and maintenance costs.
While some may afford to buy a house outrightly, you might require a conventional mortgage or traditional loan to finance your purchase. You could opt for traditional mortgage lenders like credit unions, mortgage companies, and traditional banks.
Most times, finding a traditional lender to back a purchase can be frustrating, especially if the borrower’s creditworthiness is in doubt. It becomes increasingly difficult if the borrower has a low credit score. Today, traditional financing is giving way to alternative financing methods.
Even with a poor credit history, you could find a private lender willing to assist with financing to facilitate your home purchase. Better still, you can apply for a hard money loan. Moreover, hard money financing is a viable alternative to conventional financing. Interest rates are relatively higher, though, because of the high risk of the loan.
For those asking, “What is a hard money loan?” It’s a loan facility offered typically issued by private individuals or companies and hedged against real estate. Unlike a short-term bridge loan, this type of loan is an asset-based loan with a higher interest rate. The hard loan lender determines the total loan amount.
How do I furnish the house?
Buying a house is one thing but furnishing the new space is another. While some houses come fully furnished and equipped, many others don’t. Fully furnished homes are more expensive compared to those without furnishing. Many homebuyers fail to factor in the cost of furnishing into their budgets.
There isn’t a one-size-fits-all to furnishing a house. When it comes to furnishing, the best place to start is to set your priorities and budget. Even if you can’t afford a luxurious home, you can furnish it yourself to provide the same experience. One essential item you need for a luxury house is a floor covering.
Of all floor covering types, carpets are predominantly used by most homeowners. In many ways, carpets are cheaper, easy to clean, and easy to install. More so, they provide a polished and luxurious outlook. No doubt, carpet shopping is usually overwhelming owing to the many colors, designs, sizes, and patterns available in the market. So, the best thing is to buy from reputable stores like Plum Carpet that sell high-quality carpets.
Where do I want to buy a house?
As a home buyer, you need to decide on an ideal location for your new home. Location is everything when it comes to buying a property. Choosing the right neighborhood doesn’t have to be daunting. However, the decision shouldn’t be taken lightly. Asking yourself this salient question will enable you to determine whether you can afford a house in your chosen neighborhood.
Leaders in the real estate industry recommend choosing a property with the potential to have good resale value down the road. Keeping up with real estate market trends will enable you to make a more informed buying decision. The key takeaway here is that the ability of a property to appreciate depends on its location.