Making Your New House a Home: 10 Tips for Home Buyers
So you’ve recently purchased a home, now what? There are several things home buyers should keep in mind as they prepare to make their new house a home. On the June 2nd broadcast of the show Eye on Real Estate, Dottie Herman, President and CEO of Elliman, interviewed author and real estate expert, Eric Tyson, asking him to discuss tips for those who have recently become home owners. This list originally came from Tyson’s books, Home Buying for Dummies and Real Estate Investing for Dummies. Here are some highlights from their conversation:
● Beware of solicitors – Once you buy a home, solicitors will to try to sell you products and services. For example, it is common for insurance providers to claim to pay off mortgage loans if something happens to you or you lose your job, in exchange for a new or increased insurance policy. Be wary of these offers and investigate completely.
● Refinancing – Many people consider refinancing because interest rates are low, but that doesn’t mean it’s a good option for everyone. Tyson states: “Historically, the motivation to refinance comes from the ability to save money, and refinancing always costs you money, so what you have to look at is how many years is it going to take me to re-coop the financing cost and is this a worthwhile trade-off?”
● Electronic payments –Automated payments are definitely the best option for mortgage repayment. Automated payments guarantee on-time payments, which will protect your interest rate and avoid unnecessary fees.
● Set aside cash – Dottie asked Tyson, “Is there a standard rule of thumb for emergency funds? How much is enough?” Tyson answered easily: “I think for most people at a minimum they want to have 3 months’ worth of living expenses.”
● Mortgage insurance – Buy a classic life insurance policy as opposed to a mortgage insurance policy.
● Protest Tax Assessments – Homeowners should watch their property tax figures carefully, especially if they live in an area where taxes are reassessed periodically or if their home value is based on current market values. “Sometimes local towns and municipalities get it wrong,” says Tyson.
● Home receipts – Keeping accurate records is imperative if you really want to minimize capital gains tax should you sell the home at a profit. Keep these documents carefully organized and in a safe place.
● Take time to smell the roses – In his book, Tyson relates this old adage to buyer’s remorse. For most people, buying a home is one of the biggest decisions they’ll ever make. It’s important to not only buy something within your comfort zone, but also to practice self-preservation in the buying process.