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Throughout our lives, there are some things that are always going to be more stressful than others. Passing a driver’s test, acing a job interview, convincing an investor that your new company is worth their time and money and, perhaps most stressful of all, buying a new home. It doesn’t matter how many times you’ve done it, or how simple the process should be on paper, there are always going to be unexpected wrinkles, delays and additional expenses. When you are running your own business, this is a complex headache that you don’t need.
Things are particularly chaotic in the housing market right now. We are seeing a huge surge in demand as people push for more space and more greenery after lockdown, and experts don’t seem to be convinced that things are going to change any time soon. Anyone running a small business will tell you that things aren’t exactly peaceful in that market either. We’re all trying to tighten our belts and you don’t want to find yourself eating into the safety net that you have built for yourself. If you’re looking to budget for that new home with as little stress as possible, here are a few pointers.
As we mentioned, the housing market is hitting incredible highs and there is no telling if or when things will turn around. Given the cost of buying a home right now, it is worth asking yourself if this is something that you and your family need to do immediately.
If possible, it is best to avoid trying to force a purchase into a certain window of time as this will inevitably leave you on the back foot. You may find yourself making compromises on the type of home you wanted or spending way over the amount that you had accounted for. You should also try to think about the immediate future of your business. Is this really a time when you can make room for something this stressful in your timetable? However, there isn’t always a choice in these matters is there? If you do need to make a start on finding a new home right now, then read on.
Now, everyone knows that budgeting for buying a home is never as easy as saying “We have this much to spend” and sticking to it. However, it is crucial that you have a crystal-clear idea of the state of your finances to avoid ending up in a situation where the house is going to put you in the kind of debt that you won’t be able to pay off. If you can give yourself enough time, take a long look at your outgoings and see what can be cut in order to start saving. If your business employs a financial advisor, it may be worth asking them for some pointers.
Figure out how much your ideal ceiling would be, and then set a figure for the absolute most that you can spend. There will always be the temptation to go over, especially if you find something that really looks like your dream property, but you need to remember that the costs of a new home don’t stop when you buy it. There will always be fixes, renovations and personalization to be done to a new property that come with a hefty price tag. Don’t paint yourself into a corner by paying more than you can afford.
When you are looking for a new property to buy, it always feels like time is against you. But missing out is far preferable to rushing to complete a purchase only to discover that that seemingly perfect home is nothing like what it appeared to be.
As a business owner, you know that the old saying “If something looks too good to be true, it probably is” is always true, and that goes double when it comes to buying a home. If the property that you are looking at seems to be undervalued, then there is almost definitely a good reason for that. It is always worth finding out more about the area to see if it is genuinely an up-and-coming neighborhood or if that’s just something that the estate agent is telling you. Always hire your own surveyor to perform a detailed examination of the property before you buy. It’s also worth trying to see the property at different times of the day in case the agent is trying to hide something.
Now, this part is sometimes easier said than done, isn’t it? There are always going to be elements of a mortgage or home loan that are out of your control, but there are several steps that you can take to secure yourself the best deal possible. To start with, you should do as much research as possible on the different loan providers available. Talk to your friends and family about which providers they used and see if they can give you any tips or throw up any red flags. Always make sure to read the fine print when it comes to the repayment amount and timeframe. A lot of people tie themselves in knots by agreeing to a loan that gives them what they need upfront, but which commits them to repayments they can’t afford. If you don’t want to end up facing foreclosure, make sure that you can manage the terms.
One of the most important things that a bank or loan provider will be looking at on your application is your credit score. Your credit score is a detailed breakdown of your personal, professional and financial information that covers everything from how often you’ve moved home, what your employment history is and all your past and present loans and debts. If you want to improve your credit score you should make sure that you stay up to date with your payments and avoid taking out big loans beforehand. Keep in mind that your financial history as a business owner will be part of this history. This breakdown of credit scores shows you what might cause problems and how you can give your score a boost. Tally helps you to get to grips with your debt and find ways to pay it off faster.
We have spent a lot of time stressing the importance of budgeting and making sure that you are not committing to anything that you can’t afford. Once some people get the ball rolling on a home purchase, they can find it hard to throw on the brakes. It is really important that you remember that, until you have signed on the dotted line, you have not committed to anything. It is much better to pull out of a home purchase at the last minute when you know that something is not right or if the sellers suddenly hike up the price out of your comfort zone.
We have all been through a tough time in so many ways during the course of the pandemic, and small business owners are still feeling the strain. Don’t feel rushed or pressured into this kind of long-term commitment. Talk to your partner if you are beginning to feel unsure and talk to your bank or financial advisor about what this kind of expenditure would do to your bank account.
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