The trope of the modern dream home remains alive and well, acting as a guiding light for millions of students, young professionals, and couples alike. Unfortunately, for a vast majority of people, the house of their dreams remains just that, a dream. Inflationary pressures, stagnant wages, and recurring boom and bust cycles have essentially rued the day for American middle-class families.
That being said, for the discerning, disciplined, and well-informed buyer, a dream home still remains within reach. In fact, given the wide range of mortgage products, funding options, and services, it is far easier to buy a house today, compared to a few decades ago. In this article, we list a few tips and best practices to provide a hassle-free, and financially prudent path towards dream home ownership.
This goes without saying, but for most people, dreams are quite vague, and far from being an actionable goal or vision. As such, the first step is to break down your dream home.
This means to say that your idea of a dream house should extend beyond just Victorian exteriors, townhouse in Soho, or apartment looking over Central Park, it should be a concrete plan envisioning everything you want from a house.
Do you want to live in a serene, secluded region, with greeneries all around, or in the midst of a bustling city? What type of schools would you like for your kids? Entertainment and recreational activities, and more, all of them need to be factored into your dream, or vision statement.
First-time home buyers are faced with an extensive learning curve involving various options, pricing, and terminologies before they can narrow down to their ideal homes. The most crucial of these terms pertain to the pricing, location, and size of the property.
There are further considerations depending on the bylaws and terms of the homeowners association, along with other state, county, and city ordinances.
A dream house can quickly turn into a nightmare if owners or borrowers overextend their resources by going too big, too soon. Large luxury homes tend to be overvalued, with features and aesthetics coming with little in-terms of functional or resale value.
Similarly, such houses can be expensive to maintain, and if you don’t have the disposable cash to fit a housekeeper into the equation, you might have to say goodbye to the weekends.
While houses are often stellar assets that anchor your personal finances for years to come, they can just as easily become a money pit. Payables on your mortgages will eat into your income for years to come, with uncertainties from volatile interest rates. As such, it is imperative to take the time to calculate home loan payments, with relevant stress tests to suit varying market conditions.
Homebuyers today have a wide variety of options to choose from, depending on use cases, property types, and borrower profile. From adjustable rates, floating, fixed, and government-backed, to innovative products such as construction loans, interest-only mortgages, balloon mortgages, and more.
These are again terminologies that most first-time buyers don’t pay much attention to, but can have substantial implications on their long-term finances. With the right choice and approach, the mortgage will complement your personal finances, helping you realize the most of increasing property values going forward, making it truly a house that makes dreams come true.
In an uncertain, volatile, and ever changing world, your house remains the only constant that provides much needed respite, safety, and anchoring. With the tips mentioned above, and the ceaseless range of options, you don’t have to compromise on your dreams, no matter your current circumstances.