If you plan to buy a house within the next 1-3 years, you need to be sure you have prepared a large amount of money including the value of the house and the costs incurred.
In addition to the deposit, you also need to have a sufficient amount of money in your bank account to cover property transfer fees, shipping and repair fees… ensure payment of fees. This does not make your backup fund run out.
If you buy a house for the first time, it is not easy to pay all the above costs, but you must consider securing financial stability before deciding to own a house. The founder of Beyond Your Hammock is also a CFP – Eric Roberge said that when it comes to buying a home people often make the biggest mistake of ignoring minimum costs.
“Having just enough to live means not being able to live fully, although it sounds like it, but buying a house will not make your life more magical,” Eric Roberge told CNBC Make It and added: “Like everything else in the world, the feeling of buying a new home will pass quickly, and you will soon return to a normal life”.
In fact, the cost of the house will increase continuously until you can hold the red book in your hand. Not to mention, every year you have to pay 10 – 20% of the value of the house, Cathy Derus, CPA co-founder of Brightwater Financial said. This incurred costs include expected expenses such as mortgage payments, insurance, utility bills and taxes, plus unwanted amounts, such as broken boiler or leaking roof …
Roberge also warned that you should not accept financial risks that are not worth just to have a home. The expert advises, if you intend to buy a house in the near future, it is best not to “invest in the stock market to grow faster”. “This can be a smart strategy for those who save to buy a home within the next 5-10 years. If you want to buy in the next 1-3 years, it is less wise”, Roberge said.
In order for life not to be overturned by the purchase of a new home, homeowners should have an emergency fund that is easy to access, at least to cover the cost of 6 months of living.
And although you feel ready to own a new home, if the money you earn is just enough to live, it’s best to keep it until you are completely financially stable. “Being smart with personal finance can be like hiring an affordable home and continuing to save investment for future goals”, Roberge advises.