Wednesday, November 27, 2013

Three Big Financial Mistakes Home Buyers Make

Custom Smart Homes has good reviews because we know everything there is to know about building homes.  When you’re busy planning to move into a home you designed, it’s naturally to get a little swept up in the excitement.  You’re spending time buying new things for your home, changing your address, and gushing to friends and family members about finally being able to have the home of your dreams.  Buying a new home is very exciting, but it’s also a huge financial commitment.  Purchasing a house is one the biggest financial decisions you’ll ever make, so you want to make sure you do everything right.  If you’re planning on buying a new home, make sure you avoid making these common money mistakes.

Forgetting about added costs

When most people make a budget for buying their home, they usually only factor in costs for the down payment and future mortgage payments.  When you’re buying a home, your money won’t just be going towards the cost of the actually home.  You’ll have to pay for utilities, property taxes, maintenance costs, insurance, and other services.  Talk to utility companies in your area and get an estimate on how much their services will cost.  You could also talk to neighbors and see what they have to say about utility costs.  Regardless of what you do, make sure you set aside funds for other home costs when you’re planning your budget.

Getting caught up in the feeling of “newness”

When some people buy a nice new home, they can get the urge to start buying new things that they may not need.  Your car may be running fine, but you decide to get a new one because the old one just doesn’t look as nice next to your home.  You see a beautiful dining room, and decide to toss out your old dining room furniture so you can get newer and better looking furniture.  Don’t let your finances be dominated novelty and appearance, try to avoid spending money on items you don’t really need once you move.

Putting down a nominal down payment

It may seem like a bargain when your lender says they’ll only require 4% of the total cost as a down payment, but that bargain will come back to haunt you later.  There isn’t anything inherently wrong with paying a cheap down payment, but it’ll leave you with a very small amount of equity in your home.  There’s also the added problem of having to pay for private mortgage insurance.  A lot of home buyers don’t know that many banks classify mortgages with that small of a down payment as “risky”, and to offset that risk banks make the owners pay for insurance in case something happens.  Those insurance payments will last until you have around 20% equity in your home, and that can take years to achieve.

Monday, November 25, 2013

Four Things Home Owners Wish They Had Done Sooner

Custom Smart Homes has built countless houses for people across the great state of Tennessee, and during our decades of business we’ve talked to a lot of families and future home owners.  When you’re planning a home it’s easy to get caught up in the big picture, but you can’t forget to plan and think about the little things that come along with planning and building a home.  Some people spend time focusing on having the right tile for the bathroom and having a big bay window in the living room, and forget about some of the fundamental aspects of planning a home.  They always say hindsight is 20/20, and there are some common things home owners wish they had done during the planning and purchasing process.

Saving sooner

The earlier you start saving for a new home, the better the home buying process will be.  If you wait till the last minute to start saving for your down payment, you could greatly under or overestimate just how much money you can afford to spend on your new home.  Don’t start saving when you decide on your dream home, you should start building your savings as soon as home buying thoughts enter your head.

Shopping around for mortgages

This ties in with the previous point.  If you spend too much time dreaming of your new home and not planning for it, you may not be able to handle the financial aspects of owning your new home.  Ideally you should shop around for everything you own, but this is especially true for people that are looking for a mortgage.  Don’t feel like you have to get a mortgage from the bank you’re currently with.  Check with different banks and even credit unions so that you can compare and contrast prices.  Saving $50 a month on your mortgage may not seem like that big of a difference, but that small savings you got from shopping around could save you thousands of dollars in the future.

Buying furniture before the move in

It may make sense for you to start doing your furniture shopping as soon as you have home to put it in, but you’ll be in a for an unpleasant experience when the only piece of furniture in your home for two weeks is a futon.  Don’t wait until the last minute to start furnishing your home.  Start buying your big items before the move, and opt to have them shipped to your home on moving day.  You’ll be much more comfortable in your new home, and you’ll be able to spend time settling and unpacking.

Thinking about the future

Your two bedroom home can be perfect for just you and your spouse, but if you decide to have kids your spacious two bedroom abode can get very cramped.  Nobody can see into the future, but you should try to anticipate what the next few years of your life will be like when you’re buying a home.   If you’re planning on having children, look for homes that have enough rooms.  If you’re going to be sending your kids to college, think about finding a home with rooms you can easily convert.