The house buying process has always been a complex one. There are myriad things you have to consider and a list of transactions you must make before you can finally settle in your new house. The factors that need to be taken into account once you’ve started thinking of making a house purchase will change significantly with time. Things like the interest rates or the tax laws, for example, are subject to changes in the macroeconomic environment and due to subsequent changes in government policies. If you’re looking to buy yourself a house in 2019, following are some of the important points you should be aware of when making decisions throughout the buying process.
It’s A Good Idea to Make That Down Payment
Arranging for the down payment is one of the most substantial struggles in the home buying process. Even though you can manage to acquire a mortgage loan without making that down payment, you’ll be subjected to paying the private mortgage insurance (PMI) if you choose to do so. PMI is a fee that amounts to 0.5% to 1% of the total value of the mortgage. This would mean a $1250 to $2500 a year PMI charge for a $250,000 home loan. This could really add up into your monthly expenses, considering that it’s in addition to your regular mortgage payment. Therefore, it is always a good practice to pay a down payment amounting to about 20% of the mortgage value.
The tax break that you get by buying a home is one of the attractions of purchasing instead of renting. However, the recent changes to the tax code may not allow you such attractive tax breaks anymore.
If your mortgage is in the $750,000 and above range and you’re buying an expensive property, there can be significant deductions that you can avail. However, if the loan is in the lower end range of $150,000 to $200,000, interest payments would amount to $6000- $1000. You can avail deductions if you can accrue more than $24,400 filing jointly with a spouse.
If you buy a home, you can have the property taxes counted towards that accrued $24,400 amount that you require to avail deductions. As a result, you might get only the standard deductions and not be able to benefit from the tax break you were hoping for.
Consider Additional Cost and Have Emergency Savings Ready
Additional costs that you must consider going into the process of buying a home would include the buying agent’s fees, closing costs, as well as some emergency savings for any unforeseen minor or major repairs. Closing costs include the real estate attorney’s fees and appraisal costs generally. Make sure you have emergency funds available going into this process as you may have to tend to any minor or major repairs that might reveal themselves as you start living in your new house. Otherwise, you will be forced to depend on the credit card debt to fix plumbing or heating issues as they appear.
To conclude, the home buying process is a lot more than what we’ve covered here. However, these are some of the important things you should be cognizant of as you set out on your house hunt in 2019. If you’re looking to buy a house anywhere in Orlando, Florida, you can acquire our dedicated services to make the process seamless for yourself.