Buying a home is exciting and overwhelming at the same time. The process is different for everyone, but no matter what your budget may be, and no matter how experienced you are, a financial advisor can smooth the way to better decision making.
Here are the steps to buying a home, and how having a financial advisor at your side can greatly increase the chances you find the right home for you.
Step One - Get Your House in Order
By this we mean figure your net worth, analyze your present and future earnings, and figure out what a realistic budget for your new home might be.
Too many people make the mistake of not understanding how much house they can afford, and a financial advisor gives you a much better idea than a free online calculator. They can also help you find ways to come up with an appropriate down payment.
Step Two - Start a Down Payment Savings Account
Knowing how much down payment you can afford is just the first step. Now you have to figure out how to come up with one. Should you divert funds from somewhere else? How can you maximize your investments quickly for a larger down payment?
A financial advisor is the best person to answer these questions, too. They can help you see the wisdom of a large down payment, and then find ways to scrounge up the funds for it.
Step Three - Find the Best Kind of Loan
It can seem like loans come in as many flavors as Baskin Robbins, and choosing the right one is a pivotal part of your home-buying plan. Choose the wrong loan and you could be (literally) paying for that mistake for years.
There are FHA loans, conventional loans, and then there are fixed-rate vs adjustable rate loans. Do you want a government-backed mortgage? These questions are not something your realtor is trained to help you answer. A financial advisor, on the other hand, is all about helping you with tough decisions like this.
Step Four - Find a Home
Here's where a realtor might come in handy. Find a home that's within the budget you and your financial advisor set, then make an offer. Before you commit, however, get it inspected by a certified home inspector you can trust. Use one you find independently, not someone who has anything to do with the seller.
Once you've got the right mortgage and the right home, just stay in touch with everyone involved, and soon you'll be closing and moving in. Good Luck!
Chris Hardy - CFP®, EA, ChFC®, CLU®,