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Financing a new home without compromising your savings

On Behalf of | Aug 21, 2023 | Real Estate Law

One of the most complicated aspects of purchasing a new home is the process of financing your investment. This could require time and planning to identify a strategy that will work best.

If you are not careful, buying a home could deplete your savings entirely and leave you with nothing. Knowing how to finance your purchase can help you make sustainable decisions.

Know what you have available

The excitement of buying a new home might distract you from reality at times. For example, if you find a home that checks all of your boxes, you might not think twice and neglect to notice its cost. Prior to looking for homes, know what your finances look like. Take inventory of your assets and where you could shift things around to make room in your budget for a home purchase.

Consider pre-approval

While not required, receiving pre-approval from a lender can look especially impressive when you make an offer. Because financing is often one of the trickiest parts of buying or selling a home, sellers will appreciate a buyer who already has written proof of the ability to pay a mortgage.

Compare your options

Recognize that there is more than one way to finance a home. You can fund your purchase with more than your savings. For example, if you currently own a home, you could roll the equity from its sale into the purchase of a newer home. However, if you choose to keep your current home while buying a new home, Business Insider suggests making sure you qualify for two mortgages before making such a big decision.

Owning a home can add incredible value to your assets. Going about it the right way can prevent financial discord and put you one step closer to achieving your goals.