So you’re thinking of buying a home-Exciting! You’ve done the math and can afford the mortgage payments within your budget (if you haven’t, and need help with that- we can help) Our Lore Group Agents can’t wait to help you get started on your journey to home ownership! But before you do, let’s chat a bit about money, debt, and affordability. Because it’s important to know that mortgage payments are not the only payment you’ll need to consider to sort out a feasible budget and what price of home to buy. Full disclosure: We’re Real Estate Agents, not financial experts….but that doesn’t mean we haven’t learned some helpful financial tips along the way, that we’d love to share with you (You should of course, seek the guidance and expertise of your financial advisor as well, before making any big financial decisions):

Tip #1  LEAVE YOURSELF WIGGLE ROOM: Consider not maxing out your limit. Certainly, we want you to find a home that you love, and will suit your needs for years to come (and we can’t wait to help you get started!) But while you can lock in your current monthly mortgage payments for a period of time (typically 2-5 years), you should be prepared in the future if interest rates were to increase. Similarly, property taxes rates, and utility costs can all fluctuate with inflation, so leaving yourself plenty of breathing room will come in handy should those situations ever arise. And if not, that just leaves you more vacation moneyJ

Tip #2 PLAN TO SAVE: Open a dedicated savings account for future home maintenance and repairs. Home ownership comes with many joys and responsibilities. Whether your home is new or old, unexpected repairs can and will come up that you’ll need to deal with right away; your hot water tank gave out and needs replaced (unless cold showers are your thing). Your dishwasher stopped working (who wants to wash dishes by hand). You’ve got a leak under your sink and need to call the plumber (duct tape doesn’t work. Seriously, it’s been tried). These types of things will happen at some point and saving for them can avoid a lot of financial stress and burden in the future. Consider setting aside at least 1-2% of your homes’ value, per year, in your home maintenance savings account.

Tip #3 PAY THE BANK LESS: Want to be mortgage free faster? Consider increasing your monthly mortgage payments. This doesn’t necessarily need to be a lot. You’d be surprised at how much you will save in the long run and how much faster you will pay off your mortgage, simply by adding a couple hundred dollars or more to your monthly payment. For example, on a $500,000 home purchase with 5% down, increasing your mortgage payments from $2282 to $2482 (that’s based on a 5yr. fixed rate of 3.14%) you’d have your mortgage paid off 3 years faster. Or if this is a starter home and you plan on upsizing into another home in the near future, you’ll have more equity available at the end of your term for your next home purchase.

Buying a home isn’t just about looking at beautiful houses (but it definitely is the FUN part). With the Lore Group, we’ll help you with the FUN part, and of course are happy to share our tips and real estate advice we’ve learned, not just from our careers, but from our own personal experiences in real estate along the way. Reach out to us today at 780-370-3325 for all your real estate questions and for your own personal buyer consultation with one of Lore Group Agents.