3 WAYS A FINANCIAL PLANNER CAN HELP WHEN BUYING A NEW HOMESubmitted by Helping Families Build A Financial Legacy on June 5th, 2018
Thinking about buying a home? To help you make an informed decision when it comes to the financial aspects of home buying, sit down with a CERTIFIED FINANCIAL PLANNER™ professional before you start looking. There are three ways a CFP® professional can help you be prepared to make informed financial decisions when buying a new home.
- Determine How Much You Really Can Afford to Spend on a Home
Prior to starting your home search, you typically consult with a lender to learn the maximum amount you can borrow. This is called getting pre-qualified or pre-approved for a mortgage and it gives you a price range to keep in mind before you start looking at homes. Though many people use this as their budget, this amount isn’t necessarily the amount you can actually afford. The maximum mortgage amount a lender will approve and the amount you can actually afford to spend on your monthly mortgage payment may be different. Your lifestyle, expenses, and financial goals (hobbies, travel desires, children, care for other family members, etc.) all impact your budget and may result in less money available to spend on a monthly mortgage payment. A CFP® professional can help you create a comfortable budget for your home purchase that will fit within your overall financial plan so you can continue to do the activities you enjoy and plan for the future.
- Evaluate Different Mortgage Options
There are so many options with mortgages: fixed, adjustable, points, closing costs paid, etc. and it can be difficult to know what will be appropriate for you. Just looking at the interest rate or monthly payment is inadequate when comparing options. A CFP® can help you understand each option by modeling the cash flows from the loan to show you the impact each would have on your family’s financial position in the short term, long term, and the overall cost over the whole life of the loan. With this information, you’ll be able to evaluate the options accurately and make an informed decision.
- Explore Ways to Protect Your Family from Unexpected Events
If you have a mortgage, you are required to purchase homeowner’s insurance. This protects you from unexpected expenses in the event of injuries, damages, theft, or loss from other perils. But what would your family do if something happened to you? Could they still pay the mortgage and ongoing living expenses? A CFP can help you determine the amount of life insurance you need and review the options. Use the Life Insurance Needs Worksheet to get started.
Lori Nadglowski, CFP®, MBA is the founder of Laurel Wealth Management, a firm focused on building your family’s financial legacy. For more information on financial planning and to book a complimentary discovery meeting, contact Lori at 813-252-0799 or email@example.com