Fear #1: Loss In Property Value
Homes can decline in value, even without a disaster. Neighborhoods can gradually decline, older neighborhoods can’t compete with the newer built communities, or an eyesore like a highway, prison, etc. A poor or dwindling economy can also keep home values down. Even the best home buyers can’t always predict what will happen to home prices. Certain precautions can be taken such as buying in a low-crime area where the homes are well-kept, primarily owner-occupied, and with high-quality schools nearby. Another trick is to contact the city government to ask about future development plans in the area you want to buy.
Fear #2: Overwhelming Maintenance Costs
All homes have upkeep costs, and many homes have very large maintenance bills. If you become a homeowner, avoiding these costs is inevitable. However, there are numerous things you can do to mitigate and prepare for them:
♦ Buy a home that has been well-maintained.
♦ Buy a home that has recently had major components upgraded or replaced (e.g., new roof, new water heater, new plumbing, new electrical)
♦ Buy a new home (though new homes sometimes have undiscovered defects).
♦ Regularly maintain your home to prevent small problems from becoming major repairs.
Go into the purchase with a generous emergency fund set aside for home maintenance and add to that fund every month.
Fear #3: Buyer’s Remorse
Are you concerned about buying the wrong house? Maybe it’s because you don’t know what you want, maybe you’re scared you just cannot afford it. Fortunately, you can solve that problem. Make a wish list that includes features your home must have, as well as features that you’d like it to have but aren’t necessary, and budget out every single cost of owning a home. Look at many houses to see what’s available in your price range. If you find a home you think you want to buy, sleep on your decision before making an offer. Whatever you do, don’t exceed your budget, as you will quickly regret buying any house that strains your finances. Also, don’t be afraid to walk away from a house – new homes are always coming on the market!
Fear #4: Being Unable To Afford Your Mortgage Payment
Many people wonder how they will afford their mortgage if they lose their job. They also might see that the mortgage payment required to afford a home in their area exceeds what they currently pay in rent. To deal with potential job loss, make sure to have a large emergency fund set aside. You can use this money to continue paying the mortgage if you lose your job. Also, though you may experience unpleasant collection activities, your home isn’t likely to be taken away from you the first time you miss a mortgage payment. Before taking on a mortgage, set up a budget so you know what your existing expenses are and how much money you take home every month. Also, think about new expenses that will come with home ownership, like water and trash bills. Another good idea is making fake mortgage payments for a few months and see how it affects your finances. Another huge tip is to make sure you have health insurance before you buy. Unexpected medical bills are a common source of financial instability.