5 Ways Your Finances Will Change Forever Once You Buy a Home
Category Newsletter: Lifestyle
No one can contest the fact that finances play a vital role in our day-to-day and long-term planning.
However, too many people don't brace themselves enough for the financial change that occurs when they buy a house.
Knowing how things will change, gives you the opportunity to do the required planning in order to prevent any nasty surprises that might jump up.
If you are considering buying a home in the near future, here are a few ways in which your finances will change once you decide to sign on the dotted line:
#1 - Your credit will improve
At first, your credit will not improve and will look like a tornado tore its way through your bank account. But as time goes on, your credit will eventually go up.
After a while of owning your home and making consistent bond payments on time, the bank starts to view you in a positive light.
Owning a home and making regular payments is one of the best ways to build a good credit score, which is why many people enter the property game.
It gives you a foot in the door for when you want to buy additional property.
#2 - Your expenses will go up
Unfortunately, the money that flows out of your account will increase and it is vital that you up your savings account.
Except for the fact that you have to pay a mortgage, there are other expenses that come with the amazing experience of buying a house. You will need to think of things such as maintenance or renovation, if you are planning on going that route.
Other things might include repairs such as leaks and damage from unexpected storms, replacing roofs or windows if you have bought an older house, and even mowing the lawn!
#3 - You will qualify for more loans
When your credit score goes up, then you are able to qualify for more loans.
When you own a home, you have more assets that lenders can access if you are not able to pay your installments on time. They know that you are less risky to lend money to and that you are more likely to pay what you owe them.
This means that it is easier for you to afford certain things that you want like a car upgrade or even a holiday overseas.
#4 - You realize that you can afford more than you think
Many people shy away from actually getting a loan from the bank because they are unsure whether or not they will be able to afford it. Getting the loan is the difficult part; after that, it becomes easier.
Once you get the hurdle of being approved by a bank out of the way, you will find that it is very easy to meet your goals and that your dream home isn't far outside of your reach. The prospect of affording a new home is scary, but it isn't impossible.
#5 - You will build equity
Having equity is a great position to be in. It means that you can use the equity as leverage to get other credit. It also means that you can decide to sell your home at a much later date and keep the remainder as cash in your very own bank account.
Your future will be quite different when you realize you can start paying yourself first.