The scene begins with a happy family moving into an idyllic home in a picture-perfect neighborhood or beautifully serene countryside. But a dark secret looms in the shadows. The blissful family is unaware of the bizarre trials awaiting them once they move in.
It sounds like the opening for a classic horror movie, but it happens to unprepared families everywhere. They start out as new homeowners, full of plans and promise, but they are haunted by poor decisions, bad advice and lack of preparation.
Could your home end up haunting you? Here are four ways to make sure it doesn’t.
Possessed by Payments
You’re filled with a sense of dread. Something terrible is about to happen, and there’s nothing you can do to stop it. Minutes tick by, bringing you closer and closer to the inevitable. It’s time … to make the house payment!
Over the top? Maybe, but it’s a reality people deal with every day. They bought too much home, and even on a 30-year mortgage, their payment drains their bank account every month, leaving little left over for food and bills.
Dave recommends buying a home with the 100% down plan. It can be tough to buy a home with cash, but plenty of people have done it—including this couple. If you’re going to get a mortgage, though, you’ll need at least a 10% down payment, and your payment should be no more than 25% of your take-home pay on a 15-year term. And don’t forget, you should also be out of debt and have your 3–6 month emergency fund.
Is there anything worse than that heart-pounding, gut-wrenching feeling you get when, as you’re walking along minding your own business, someone jumps out from around the corner just to scare the pants off you? That’s probably mild compared to the feeling you get when you find out the interest rate on your adjustable rate mortgage is going up.
Never sign up for an adjustable rate or interest-only mortgage. Always get a fixed rate mortgage so you’ll know exactly how much your payment will be for the life of the loan.
In every home, a dark specter lurks. One day, it may hide in the plumbing. As summer approaches, you can depend on it taking up residence in the air conditioning unit. Its name is Murphy—also known as the Ghost of Whatever Can Go Wrong, Will Go Wrong. And it is the reason every homeowner needs a solid emergency fund.
Becoming a homeowner means more than being responsible for the mortgage payment. You’re also responsible for all the maintenance and upkeep costs. So as you budget for your new home, be sure to add line items for these expenses as well as a cushion for the unexpected.
It’s a real-life horror story that’s played out all too often. A family’s home is destroyed by flood, fire, tornado, hurricane or any number of unpredictable events. After rummaging through the rubble, the family makes plans to rebuild, only to find that their insurance coverage falls far short of replacing the home they had.
Choose insurance that covers the cost of replacing your belongings and provides enough coverage to rebuild your home if it is destroyed or damaged. Check your coverage each year to make sure the amount is sufficient.
Real World Experts
If you’re ready to buy or sell a home, one of Dave’s real estate Endorsed Local Providers (ELPs) has the experience to answer all your questions and help you save time and money purchasing your new home.