Steps to Savvy Home Ownership | Dottie Herman Speaks to Author Eric Tyson

Steps to Savvy Home Ownership

 

Purchasing a home is a huge investment.  Expert Dottie Herman, CEO and President of Elliman, recently quipped that it is a process with two hurdles.  “Getting the money to buy is hurdle one, and paying is hurdle two,” she stated.  She and real estate author Eric Tyson offer prospective and current homeowners salient advice to help them avoid some of the other hurdles of home acquisition and ownership. 

 

Be Wary of Solicitors

It may be easy to accept offers that arrive from people with whom a person already does business, but individuals should carefully consider such offers and research competitors to ensure that it is appropriate for the homeowner’s needs.

 

Trust a Financial Expert

Families should hire an professional advisor to provide guidance in evaluating options for investments, savings plans, and home purchases.

 

Carefully Select Your Real Estate Team

In addition to a qualified financial advisor, it is imperative for a prospective homeowner to hire professionals to assist in this major purchase.  An individual can research qualifications for a real estate agent, mortgage broker, and insurance advisor to assure that, in the words of Tyson, he “can evaluate these people and make a good hiring decision.”

 

Reconsider Refinancing

Since most individuals looking into refinancing are doing so in order to maximize finances, it is important to evaluate not only the potential savings from the lower rate but also the cost of the refinancing process itself.  Tyson suggests asking oneself: “How many years is it going to take me to recoup the financing cost, and is this a worthwhile trade-off?”

 

Utilize Electronic Payments

New homeowners and long-time homeowners alike can benefit from taking advantage of having mortgage payments automatically deducted from checking accounts.  This innovation allows individuals to avoid late payments and protect credit scores and interest rates.

 

Create an Emergency Fund

Generally, individuals and families build an emergency-specific savings account equal to their current living expenses for three months.  However, when circumstances are, as Tyson says, “volatile,” families are encouraged to increase this amount of savings to cover six months‘ worth of costs.

 

Invest in Life Insurance

Instead of investing in mortgage insurance, savvy homeowners should purchase a traditional life insurance policy.  Tyson advocates for purchasing a policy large enough to replace the income for the number of years the individual deems necessary.

 

Examine Taxes

Property taxes may be reassessed to reflect current market values.  Tyson states that “sometimes local towns and municipalities get it wrong.”  Homeowners should know their home’s current value and regional market trends and compare those numbers to their assessed property taxes. 

 

Protect Important Documents

Knowledgeable homeowners save the documents related to their home purchase, mortgage, insurance, and major improvements or repairs.  Keep these papers together in a safe place that is easy to remember. 

 

Enjoy the Experience

The process of purchasing a home can be riddled with doubt and anxiety.  Tyson advises potential homeowners to “smell the roses” and practice self-preservation to ensure that at the end of the process, the individual or family is satisfied with not only the home itself but also the journey to get there.