Buying a home is simply wildly expensive in today’s real estate market. With home prices nearing and hovering around all time highs across the country and in all markets, it can feel like as soon as you have saved up for your down payment you need to get out there making offers to secure a home that you want. But there is a lot of risk in jumping into a home purchase without enough saved up. Here are three reasons why you should always save extra before buying a home to make a good decision.
Give Your Budget More Room
The first reason why you should save extra before buying a home is to give your budget a little wiggle room. If you are putting in an offer as soon as you can get the bare minimum finances together, you run the risk of pushing yourself out of an affordable price range and buying much less home than you can really afford. With a little extra, you will be able to look at homes that are right on the edge of your budget to see if the price is worth the additional amenities that a bigger cost offers.
Pay for Closing Costs
Another critical reason that you should save extra before buying a home is to pay for the closing costs of buying your home. When you purchase your home, you not only have to pay the price of the house, but also the closing costs which can go to agents and lenders. Agent commissions are usually 6%, but there’s room for negotiation. Always work to negotiate with your agent before looking for houses and what your commission will be, as depending on your budget, market, and the skill and experience of your agent, you may be able to get a deal.
The final reason why you should save extra before buying a home is so that you have a bit saved up for renovations and necessary repairs to your home. Unless you are buying a brand-new construction home, then there will almost certainly be things that you wish to change or renovate within the home to make it your own space. If you have a bit extra saved, you can do some of these repairs or renovations before you move into the home.
Buying a home is a great decision for people looking to grow their wealth and own their own property. But before buying it is smart to save a bit more than you need. When it comes to extra budget space, paid closing costs, and a big renovation budget, saving a little extra before buying is the perfect decision.
Check out this article on big selling points you can’t miss out on a home!