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Planning for Your First Major Purchase
Buying your first car or home is a big investment and deserving of many considerations. How much will your budget allow you to spend? How much money can you offer for a down payment? Car options, realtors, insurance and mortgage can become very confusing and overwhelming. At the same time, once you have figured it all out, you’ll finally have a home or a car to call your own.
When attempting to buy a home, most people cannot pay for it all at once. This is why a person receives a mortgage and must pay a certain amount every month. The more you are able to put down for a down payment, the lower your monthly payment will be. The person selling your house may ask to see documentation guaranteeing that you can pay. To receive more negotiating power, it helps to have a mortgage pre-qualification. Banks like Univest can work with you and your realtor to assure that you are a qualified buyer. Use our calculator to plan your budget or schedule your mortgage payments.
A real estate professional can be one of the most important tools for getting a good price on a home. Make sure your realtor is trained and experienced and part of the local board of realtors because otherwise he or she could just be licensed with a state, with no professional background. A realtor helps with negotiating deals and can give you tips on finances. He or she can also assist you in finding a home that suits you best, as well as inform you on the taxes and costs of the area that can affect the cost of the home.
Homeowner’s insurance is another important aspect to take into consideration. Choose the policy that suits you and your home best. Some policies only have minimum coverage or do not insure your possessions or include earthquake and flooding insurance. There are about seven different basic policies to choose from, which you should take into consideration before buying a home and buying insurance.
Also, remember to take into consideration how much you spent on the house. If you spent a large amount but have a less expensive insurance policy, chances are you would not receive adequate insurance reimbursement in the event of a claim. Also, if you have a poor credit history, insurance companies might charge you higher premiums. Before you buy a house, it is important to not only focus on the price of the home, but also all the upkeep, taxes, closing costs and insurance that comes with it.
A car might be less costly than a home, but it is still a big investment. Like a home purchase, take into consideration the initial cost, but also any maintenance costs, gas prices and insurance. If you want to save money, you can consider buying a used car or even leasing. Like home insurance, car insurance plans vary in the amount of coverage you will receive. Make sure medical bills and cost of repairs is covered in your insurance in case of an accident. Insurance should also cover theft, vandalism and other non-auto related accidents and accidents caused by an uninsured driver. Take into consideration how much coverage you want from your insurance before purchasing a car because it can affect your overall budget.