KNOW WHAT YOU CAN AFFORD Affordability is a huge issue. That means not only affording the mortgage but also the taxes, the maintenance, the insurance and having money set aside for emergencies.
"Otherwise, you are house rich, cash poor," said Kathleen Grace, certified financial planner and managing director at financial services company United Capital. The conventional wisdom for a down payment has not changed. Expect to put down 20 percent for the mortgage. At the same time, have an emergency fund to cover at least six months of expenses, experts say.
Even if you are purchasing a new property, you will need a reserve to cover repairs. Remember that you have to pay property taxes, too. A good way to make sure that you can is to divide the tax bill by 12 and set the money aside each month.
A spreadsheet can help you figure out all the costs of owning the property. Use a housing calculator like financial services company Fidelity's (here) to figure out what you can afford.
"Only take on buying a home if it's something you have ample funds for," said personal finance expert Farnoosh Torabi.
PROTECT YOUR ASSETS When you are buying a property alone it becomes even more important that you have adequate insurance coverage. That includes life, disability as well as healthcare insurance.
You might also want to look into setting up a trust so that the proceeds from your insurance policies go to your independent beneficiary if something happens to you.
"All the responsibility lies on you," said Chantel Bonneau, wealth management adviser at Northwestern Mutual. "So it's even more important that you protect your income, which is your biggest asset."
If you get married, you can also look into shielding your home in the event of a divorce with a prenuptial agreement. Another option? Keep your property entirely in your name, said Torabi.
CONSULT EXPERTS AND TAKE YOUR TIME Since buying a home is one of the biggest financial decisions most people make, it is a good idea to work with a real estate agent and consult with a financial adviser. Do your research and take your time.
That's exactly what Lorenzo did. The process of finding and buying the condo, which was priced in the $300,000-range, took about four months. She went through several offers before finding the right place.
"It's a demanding process that requires a lot of critical thinking," Lorenzo said. "You can only grow from the experience."
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