Buying investment property like a home for the first time is a daunting and overwhelming experience. There are many facts to consider before you make a final decision, not to mention moving costs like renting a van or storage space between places. This isn’t an easy decision to make it’s one that will have a resounding impact on your life.
Once you’ve made the decision that you’re going to buy a new home you have to do some homework, literally. Read up all the books you can find related to buying a home. Learn all the details to stop people fooling you into making the wrong choices. Remember, people in the housing game will do anything they can to make more money out of you.
As well as the research, it’s important to identify where you’re going to get the funds to finance the purchase. There are countless ways to fund buying a home. I’m going to elaborate further below.
If you own an IRA account it’s possible to use it to save up. If for example you own Roth IRA account you save up and withdraw from it before the age of 59 without the drawback of having to pay taxes or charges.
Another money gathering method is through your own personal savings. This is an old method that requires incredibly strict discipline. If you’re being paid a weekly salary you may consider automatically paying a fixed percentage from your regular account into your savings account. This way you’ll not have the temptation of spending all of your earnings without saving. Avoid making frequent withdrawals it was opened as a savings account.
When you’re considering a house purchase determine a target date. If for example you’re buying two years from now putting your money into a conservative investment tools should be the way to go. Check out any investment guide for tips.
If on the other hand you’re not buying for five years you can be a little more aggressive and begin investing in higher yield investments, these have the added benefit of performing better over the longer period.
According to a survey conducted recently by a National Association, 23% new house buyers are given their deposit payments from friends and relatives. If this isn’t possible for you there are charities, banks and government institutions that are only too happy to provide assistance. Many of them offer to lend you 3% of the price as part of their down payment conditions.
It is also a good tested method to keep all your bills up to date to increase your credit score. Having a decent credit report and credit score will lower the interest charged. As early as you possibly can it’s a good idea to try to clean your finances so that when the time arrives you’ll be able to successfully apply for a mortgage without having to deal with the high interest rates.
Buying a home for the first time requires a lot of research and preparation. This isn’t a simple decision and investment to make. It’s something that will affect you for the rest of your life so make the correct preparations.