When a New Home is the Best Financial Option

[Apr 26, 2007.]

 

Owning a home remains the quintessential American dream. However, given the fluctuations within the housing market, you may wonder whether buying a house would be the best option in your particular case. Before you actually purchase a new home, there are a few key things you should consider.

One of the most important considerations is whether you can actually afford a monthly house payment. You'll also need to factor in tax bills, insurance, maintenance costs, and other costs associated with owning a home. Of course, one advantage to buying a new home is that your maintenance costs are likely to be lower than they would be if you purchased an older home. In any event, it's a good idea to check with a mortgage company and to get pre-approved for a loan before you actually go house-shopping. The mortgage company will pre-approve you for the amount you could be expected to afford.

Another important consideration is location. You'll want to purchase a home in an area where real estate values are growing rather than stagnating. Thankfully, that is typically the case in a new housing development. Also, try to avoid buying a home near an airport or a power plant, where the value of property may be lower than it would be otherwise.

When you're considering buying a new home, be sure to obtain an evaluation from a home inspector. The inspector will be able to determine whether the house has foundation problems or other serious flaws which could lower your property value and raise your maintenance costs.

In addition, take the time to find out the average home appreciation rate in the market you're considering. If the rate is good, it is likely that you'll be able to make a profit when you go to sell your home. Even if you intend to stay in your home for quite a while, it’s a good idea to get an assessment of the local real estate market.

Despite these important considerations, buying a new home can be one of the smartest financial investments you'll ever make. While you can theoretically make good money in the stock market, most people find that the bulk of their wealth comes from the property they own. A house is the kind of investment that can pay dividends for decades to come.

Julie-Ann Amos
26th April 2007

More Information:

• How To Tell When It Is A Good Time To Refinance
  With the economy fluctuating as much as it is today, every now and them it produces a time when it is a good idea to refinance your mortgage. You have heard of others making that change, and may have heard that some got a much better deal. Mortgages are different though, and so are people's circumstances.