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Four Things to Consider When Choosing a House

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Buying a house is a major decision, especially if you’re a first-time homebuyer. Purchasing a house means committing to a neighborhood, home type, commute, and a number of other decisions all at once. Here are some factors you might want to consider before putting down an offer.

Your priorities

Every homebuyer comes into the process with different priorities. You may decide to prioritize the layout of the home over its size, for example, or favor a home in a better school district over one close to local shopping centers. During the homebuying process, you may discover priorities you didn’t know you had. Seeing a home in a busy nightlife district might convince you of the importance of living in a quieter neighborhood, for example. Or maybe trying to navigate traffic on your way to a showing might make you consider homes with access to public transportation.

If you’re buying with other people, house shopping might also put you at odds with your spouse or family. You might find that their priorities are different from yours. If you’re looking for a fast drive to work, but they want easy access to parks and beaches, you could find yourself on very different pages. Before you start shopping, make sure the homes you’re looking at take everyone’s priorities into account. Write down your individual wish lists and decide ahead of time how to weight each consideration.

Your monthly budget

Beyond the initial costs of homebuying, it’s important to factor in costs that aren’t built into the price of the home or the mortgage. Your new neighborhood might come with different prices for local goods and services, for example, or taxes you didn’t consider when you first viewed the home.

Before making an offer, take a thorough look around the neighborhood and make note of things that might change your total cost of home ownership. Perhaps grocery prices are higher in the area, or local mass transit costs are lower than in your current neighborhood. Get on local neighborhood social media groups and ask about costs like taxes, childcare, or gas.

Your future plans

Many people purchase a home expecting to live there for many years. A lot can happen in that time. Think about what the next couple of decades might look like in the home and neighborhood you’re considering. Do you plan to have children? Consider how much space you’ll need, and look into childcare and schools in the area. Are you retired or retiring soon? Think about the needs you might have as you age, such as accessibility or home care.

Your risk management

A crucial part of homebuying is planning for worst-case scenarios. If your family depends on your income to make mortgage payments or cover living expenses, you’ll want to make sure that your dependents will still be able to stay in the home if you pass away or are otherwise unable to make the payments. This might mean evaluating your emergency fund, insurance, and other financial factors.

Some types of insurance make particular sense when your family depends on your income, such as term life insurance, which can cover you for a length of time that lines up with your mortgage term. This way, your family can pay off the mortgage if you were to pass away unexpectedly. A permanent life insurance policy, such as whole life insurance, may also make sense. What is whole life insurance? It’s a type of life insurance that permanently covers you as long as premiums are paid, guaranteeing your family a death benefit if you pass away. This type of life insurance also accumulates a cash value, which you can take a loan against for any reason. This is helpful if you want to make home improvements or need to make repairs.

Choosing a home

Choosing a home is never an easy decision. However, getting clear about your and your family’s needs, budget, and priorities will make the homebuying process much easier. With enough preparation, you’ll be able to ease some of your fears about homebuying and enjoy your journey to home ownership.

The primary purpose of permanent life insurance is to provide a death benefit.  Loans taken against a life insurance policy can have adverse effects if not managed properly including a reduced death benefit or an unexpected taxable event

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