Buying a home is one of the biggest financial moves that you will ever make. There are a number of issues you should be aware of, including how the costs of purchasing and owning a home will impact your overall financial planning goals.
In this checklist, we cover a number of financial issues that you need to consider when buying and owning a home, including:
- Cash flow issues, such as the costs to maintain the home once you own it, the impact that owning a home will have should one spouse need/want to stop working to raise children, as well as how long they intend to live in the home.
- Financing issues, including debt ratios, qualification for advantageous mortgage terms and/or special lending programs (e.g. VA loans), and the loan application process.
- Income tax and estate planning issues, including mortgage interest deductibility, basis tracking, and how to properly title the home.
- Insurance issues, including property and casualty policies, and appropriate levels of life insurance coverage.
This is a comprehensive checklist of the types of issues that you can discuss with your advisor when you are considering purchasing a home. Becoming fully aware of the financial ramifications of such a major decision and being equipped to deal with these issues allows you to enjoy home ownership to its fullest.