Getting Your Financial House in Order After Purchasing a Home
Mar10

Getting Your Financial House in Order After Purchasing a Home

Part four of our “First-Time Homebuyers Series” continues today with another post from John Foxworthy. So you’ve found the perfect home, got an accepted offer, and made it to closing.  Here are a few steps you can take to make sure your dream home doesn’t turn into a financial nightmare. Build your liquid cash reserves We usually recommend keeping three to six months of your salary as a cash reserve.  This reserve can be used to keep you afloat in the event that your income is interrupted.  If you should lose a job or need to take a medical leave, this fund will be there to pay your mortgage, auto and home insurance, and utilities.  It can also be used for emergencies like a car repair or an unexpected medical expense.   Set money aside for future home repairs This fund should be kept separate from your liquid cash reserve, which is designed for income replacement.  As the homeowner, you will be responsible for any expenses associated with the home so it makes sense to have a fund in place.  At some point, a major repair like a furnace, water heater, or a roof will be needed.  You should set up an automatic transfer every pay period to a separate “home repairs” account in order to start building up some cash.   Adjust your budget Purchasing a home is one of the biggest financial transitions that a person will make in their lives.  It goes without saying that you will probably need to make a significant adjustment to your budget.  If you did your homework to make sure you were purchasing a home that was within your means, you shouldn’t need to change your lifestyle too much.  However, it is a great time to look at your spending patterns and see where you can be more efficient and effective with your income and saving plans.  You can use a financial software program like Mint.com or Quicken to do it yourself, or it might make sense to talk to a financial professional who can help you with a more customized cash flow plan.  Stick with an independent firm that offers fee-based financial planning and coaching.   Do your protection planning Whether we like it or not, sometimes things don’t go as planned.  Accidents happen, people get hurt or sick and can’t work, and sometimes they even die prematurely.   Before owning a home, these risks were important, but they become more important now that you have a significant liability associated with your mortgage.  Fortunately, there are tools that allow us to mitigate the risk of premature death or disability.  Life insurance...

Read More
Finding the Perfect Home with a Realtor
Feb24

Finding the Perfect Home with a Realtor

If you’ve been following along with the First-Time Homebuyer Series, you have now heard from a financial advisor and a mortgage specialist. Now, that you have your financing ready, it is time to find a realtor! 1. The first thing I always tell clients whether they are buying their first home or their tenth home, is to always ask a professional. It never hurts to ask around to friends, family members and check reviews online to make sure the person or team you are working with is working in your best interest. A good real estate professional will advise you throughout the process, take a step by step approach, point out the good and the bad and negotiate the best deal for you. Make sure to find a trusted real estate professional with the heart of a teacher, not the heart of a salesman. Some realtors are only looking for a transaction and others are looking to build a relationship. Keep in mind, for you the buyer, the realtor will not cost you anything! The commission for the listing agent and the buyer agent are paid by the seller at closing. 2. Now that we have that out of the way, let’s get the home search started. We like to get started by meeting the client and determining what they are looking for in a home. This may include the number of bedrooms, bathrooms, size of home, price range and especially the location. More often than not, we actually start to narrow down what the client is looking for after seeing a few homes. Typically, there are wants and needs, so it really helps to distinguish the difference. If you say “this home is perfect BUT”, then you know the home is not perfect. Make sure you don’t settle on something that you are not going to be happy with because this is a huge purchase/investment. Once we get a better idea, we can start looking. 3. Your realtor most likely set up an automated search using your criteria to find homes that fit what you are looking for. With technology today, you will most likely also look on your own using sites such as Realtor.com, Zillow, Trulia or Homes.com. Sometimes, there is a little bit of a delay from when the information hits these sites from the MLS (Multiple Listing Service), so some of the information may be incorrect. In the current real estate environment, the supply of homes is very low and there are a lot of buyers currently looking. With that being said, if the homes are priced correctly they have been selling quickly, so make...

Read More