Think You're Ready for a Luxury Home?

Real Estate

We can always dream about buying a luxury home and sometimes it may seem like an easy thing to do. Right? Do people worry about financial constraints when making the purchase? How do you know when you are ready to make your luxury home purchase? It's really about being prepared and taking some smart steps.  Be sure to have a good realtor at your side and don't be afraid to ask questions.  

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Be sure to know what you want! Make a list and check it twice.  Do you want a view of the city or the ocean?  Is your dream home on a few acres with no neighbors?  Think about where you picture yourself livening when it's your luxury dream home. You need a place to start with your search and the first place to start is the location and setting.

Understand the market you are looking to make a purchase in and how similar homes are being priced and sold.  The best way to do this is to ask your real estate agent what the comparables sold at -- not just what the asking prices were!  It's great if someone is selling at a really low price, but does that mean that needs 500 times that in renovations? You will save a lot of time (and money) if you know what types of homes can be attained in what price range.

Ask yourself if you are confident about your credit standing.  For those getting started, credit standing is a measure of a lender's willingness to lend money to a particular person or organization, depending on their ability to repay.

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Assess your financial situation and be realistic on what you can afford. Go into every detail of how much of your monthly salary goes into all the daily expenses and monthly bills you have. How much of it goes to your savings account? If you ever lose your main source of income, how would you deal? Will your savings cover the cost of everyday living and the mortgage on your new home? Online calculators abound to help you make an informed decision. A rule of thumb is to not spend more than 33% of your monthly income on home payments alone. Doing so will cause you more stress as any delays in payment of your salary would also mean a delay in your monthly home fees which can set you back on your credit rating.

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Another expert real estate tip when purchasing a home is to make sure that you get pre-approved for a loan first before shopping for new luxury homes for sale . Getting pre-approved will help you to better determine how much house you can afford. Don’t be afraid to shop around for loans with the best rates. Once you’re pre-approved, the next step is to know everything there is to know about these loans. Know the financial implications of getting a loan, what are the different types of loan you can afford, and how these loans will work for you - what is included in the cost of the loan: points, closing costs, private mortgage insurance, and more. Always make sure to read all the clauses and go over the entire fine print before agreeing to give your business to these banks or agencies.

Lastly, think about your current home and what you like about it.  Of course you are looking to upgrade to your luxury home, but think about it.  Do you enjoy and want to incorporate into your new home? Then think about what you want to change. What is motivating you to make a fresh start? Make a list of pros and cons so you know exactly what to preserve and what to change.

Buying a home is exciting. Especially a luxury home. With the right research, understanding of the market and realtor, you will be on your way to your dream home!