Figure Out Your Financial Strategy

Know what you want from a home before buying one.
REMAX_Top-dollar-house-money_s4x3

REMAX_Top-dollar-house-money_s4x3

You’re looking for money to buy a house. But before you approach any lenders, figure out your financial strategy. Ask yourself these questions:

  1. How long do I plan to live in this house?
  2. Where do I see myself in five or 10 years?
  3. Do I have to or want to make home improvements?
  4. Do I want to keep cash on hand for other investments?
  5. Can I take financial risks?
  6. Do I want to be debt-free?

Now that you have a reasonable picture of your financial philosophy, shop around and evaluate your options. Don’t rush into the first loan offer you get. If you can afford to take financial risks and have the assets and credit score to back it up, you can get the best deals. Consider mortgages with adjustable rates, longer pay-off terms (30 years or more) and interest-only payments. You can also find lenders who don’t require a down payment or who will loan you more than the home’s sale price up to its appraised value. These products let you pay the least amount of cash. The thinking is: Live as well as you can while still being able to comfortably pay the bills. Don't worry about the overall debt, especially since much of it is deductible on federal income taxes.

If you’re the type who shirks from debt and risk, find loans with shorter terms (15 years or less) that allow you to make big down payments and mail extra payments whenever possible. The thinking is: Live conservatively so you'll be able to handle whatever problems arise down the line.

Here are more tips for finding the right loan for your financial strategy:

  1. Use mortgage calculators and other tools that let you see exactly how much you'll have to pay under various scenarios.
  2. Shop for the best rates from both local banks and national lenders. Consider working with a mortgage broker.
  3. Decide if you are willing to pay for points; to get a lower interest rate, or take a higher rate to keep closing costs down.
  4. Combine different loan features to create a loan that is comfortable for you and offers the flexibility to accomplish your goals.
  5. Don’t forget about other costs like property taxes, insurance and homeowners' association fees.
  6. Ask about alternative loan terms, such as 20 years. They exist though many lenders don’t advertise them.
  7. Consider refinancing your current home; if you need cash for a second home.


(Information from Scripps Howard News Service was used in this article)

Next Up

How Do I Figure Out My Home Value?

Here are four things you need to know about how appraisals are done.

Financial Strategizing for New Homeowners

After completing a major purchase like a home, it's important to maintain a sound financial strategy so you can enjoy the true benefits of homeownership. Here's how to do it.

How to Be a Financially Savvy Homeowner

Many property-related actions trigger a tax or tax benefit.

Are You Financially Ready to Buy an Investment Property?

Here's what you need to consider in this real estate market before shelling out for an investment property.

Check Out Your Friend's Credit

If you are buying a home jointly with someone else, your credit score may not be the one the lender looks at.

Rent Out or Swap Your Unsold Home

If you're having trouble selling, try marketing it as a vacation destination.

Always Have a Back-Out Plan: Contingencies You Must Have

When dealing with appraisals, loans and flaws in the condition of the house you're about to buy, having a contingency plan allows you to back out of the purchase with no penalty.

Sniff Out Potential Problems When House Hunting

Avoid costly repairs by trusting your nose when house hunting.

Look Out for Foggy or Nonfunctioning Windows

Foggy windows can be a big problem, so keep your eyes open when home buying.

Which Game of Thrones House Do You Belong In? Take the Quiz and Find Out

With the season premiere of Game of Thrones only two days away, we just can’t wait to indulge in a little GOT fun. So, tell us: Are you a fierce warrior hailing from the House of Baratheon? Or perhaps you belong in the House of Lannister, spending your days lavishing in the lap of luxury. Find out which of the Great Houses of Westeros is the one for you.

On TV

Stories We're Following

Shop This Look

Found a living space you love in HGTV's Photo Library? Get the look in your own home with products from Wayfair.

Follow Us Everywhere

Join the party! Don't miss HGTV in your favorite social media feeds.