How to make the most of your down payment, mortgage, and monthly payments to get the most value for your money?
Whether you saved up a lot of money before purchasing your home or you already have a down payment, there’s no reason to let the savings go to waste. The following advice will show you how to use your home as a long-term investment and make the best out of what you already have. After all, it’s not every day that you get a chance to invest in real estate.
If you know exactly how much equity you have in your current home, then it’s much easier to calculate the amount it takes to purchase a new home and its potential appreciation.
Make a priority list:
The best way to invest in real estate is with a mortgage. Make a priority list with the following top three most important considerations:
Getting the best value:
1) To get the most value for your money, you have to use it wisely. Therefore, save up for five years before borrowing any large amount from a bank or mortgage company.
2) Do not waste your money on a house that costs more than two or three times your annual household income. You can get better value for your money by buying a home that fits into an affordable budget.
To get the best value, look at purchasing a home for between 1.5 and 2.5 times your annual household income.
1) Calculate how much you should be able to spend on housing every month, factoring in what you want to use it for as well as any extra funds you’d like to have for fun.
2) Set a goal of purchasing a home that would allow you to pay off your mortgage in ten years or less.
3) Calculate the mortgage’s amortization. It also shows you just how much of your down payment will go into the house itself versus going to the bank or mortgage company as profit.
Always remember how much money you have saved up so far. You can begin looking for a home without having to give any money upfront. When buying a home, make sure you are not doing anything unnecessary with all the extra money you’ve saved up.