The U.S. housing market is on track for its best year since 2006.
With home prices up, foreclosures down, and more buyers entering the market, it appears as if the housing financial crisis is finally over! Even though the market crash can feel like a distant memory, it’s important to remember all of those things that the nation, as a whole, learnt during that time.
With these 5 financial lessons, you can stay on the path of successful homeownership.
- The house isn’t always an investment
One of the biggest mistakes made by home buyers was believing that the value of their home would only increase, even in a short period of time. Unfortunately, it’s not guaranteed that you’ll be able to sell your home for more than you paid.
- Every homeowner should save an emergency fund
Most homeowners have at least six months’ of expenses set aside in an account for those unexpected home costs. This can range from a broken air conditioner to paying the mortgage if you lose your job.
- Beware of risky mortgages
During the housing crisis, borrowers often financed their homes with risky mortgages that had increasing payments, assuming that they would be able to refinance before the mortgages reset. When looking into mortgage and interest rates, be aware that rates only adjust in one direction: up.
- Think logically
Just because you get approved for up to a certain amount does not mean that you have to spend that much. Typically, the bigger the home, the larger the costs will be. That can range from lawn expenses, to taxes, to the mortgage. Buying more than what you can realistically afford can hinder your child’s ability to go to college, for the family to travel, or for you to save for retirement.
- Homeownership isn’t for everyone
If you are more of a free spirit who loves to move from place to place, then maybe it’s best that you don’t get bogged down with owning a home. With purchasing a home comes responsibility, requirements, and expenses. If you are unsure that you can handle it, don’t start the process.
To aid the process of taking out a home loan, contact the strategic home loan specialist, Andraya Coulter. I serve Walnut Creek and the surrounding Northern California areas and I can guide you in the process of funding a house that you can call yours!