One of the decisions with the most significant personal financial and emotional impact is the purchase of your own home. With credit or not, it exposes us, on most of us, to a severe stress test.
Over time, we have gathered the most important elements you should consider when you are on the threshold of your home purchase, according to lakerealty.com.
1. Location and neighborhoods
Americans say “location, location, location” and know why. The price or perceived value of a property depends directly on where it is located. You can have a gorgeous villa in the middle of a bad neighborhood, and its value will be considerably diminished. While a cheaper house on the outskirts will increase your spending of time and money on work and school trips.
2. Financial immobilization
What is the amount you are blocking to buy this house? You have to put down a sum of money as an advance so the bank can become your partner in buying the house. That’s the amount you’re immobilizing. The fundamental question is, how much money could produce this amount within a time frame equal to the amount of credit.
3. Evolution of property prices
It is one of the most important indicators that shows you the price trend for the area you are interested in and how it behaves with similar ones in the same locality.
4. Rates of rent growth
How the rents have evolved in the area where we want to buy the property in recent years and what will be the future trend. It is a significant indicator if we want to buy a property to rent it.
5. Debt calculation currency
If you buy the house with a bank loan, the currency of credit would be ideal to be the currency in which you receive most of your income. Otherwise, you may have very unpleasant surprises such as Swiss francs (CHF). Credits in that currency led to a doubling of the monthly rate within a few months.
6. Duration of the loan
Without too many calculations, most credit buyers use the maximum lending term (30 years) just because they offer them a lower monthly rate. Finally, the total credit cost will be considerably increased. With a credit of 50,000 Euros, 25 years instead of 30 years you can leave in your pocket an amount of almost 10,000 Euros.
7. Interest rate
For a euro credit for 30 years, a 1% difference in the interest rate can bring you additional costs of over 11,000 euros. Obviously, there is an essential part of your information about your market loans and your negotiating skills. Very interesting information about this topic can be found here.
8. Level of property taxes
There are differences between the taxation of property belonging to individuals and legal entities. It should be noted that the taxes on buildings of individuals are drastically increasing (65% -300%) in the case of possession of more properties than the residence.
9. The duration of ownership of the building
How long do you want to live in that home? If it is just a temporary home to complete your studies or you want to make it a home where you grow up your children.
10. The renovation cost
How much will it cost to renovate and redecorate your home? No matter who lived there before you, you will certainly need to invest a considerable amount of money in renovation.
11. Maintenance costs
That is, all the expenses we have to make to maintain the dwelling. In addition to utilities, joint spending can have a significant impact on our budget. For example, at a house in a residential district, only street lighting and street cleaning cost 45 euros per month.
12. Utility Costs
All that means the utilities necessary for the optimal comfort of the house. Heating, running water, lighting and all the other, correlated It is good to know them before buying the home because otherwise, you might have real surprises. It is not the same to pay utilities of 500 dollars or 200 dollars per month, just because you have a very high energy house.
13. The degree of finishing
Most sellers of new homes, selling semi-finished dwellings. First, because they are cheaper and then to be personalized by the buyer. The finish of the house will influence the total cost of the house by at least 15-20%
14. Tax on the sale of the property
When you sell your property, you will pay a tax of between 1% and 3% of its value depending on the transaction value and the holding period of the real estate. If the ownership of the property is less than 3 years, you will pay the maximum amount. A property of 45,000 Euro owned less than 3 will have a tax of 1,350 Euro.
15. Price per square meter
One of the key indicators in real estate, because it allows comparison between different areas and even between countries and localities.
16. Costs of housing insurance
That’s where you want to secure your home more than the mandatory insurance cost of 10 Euro/year. When you conclude an optional insurance you will pay annually between 0.1-0.4% of the insured value of the dwelling.
17. Distance to place/places of work
Crucial for large cities or localities remote from workplaces. The cost of time-shifted journeys and money may in some cases even amount to a significant percentage of the labor and hard earned each month. I know people who spend more than 4 hours each day on their way to and from work. Worth this effort?
18. Energy certificate and energy class
Interestingly, because it is mandatory when we want to sell the home. With a significant budget impact when the energy class of the house is closer to G (consumption of 820kW / m2 / year), it will bring us burdensome heating costs, especially when we have low incomes.
19. Features and finishes
The more advanced they are, the harder our financial effort to redecorate and raise the standard of living comfort. Provided that these finishes are to the tastes of the new owners.