Buying a house or car can be a daunting experience. Not to mention all the potential buying options, the paperwork, dealing with agents, negotiating, etc.; it can also be quite overwhelming. In this article, we’ll list the top five most important pointers so that you can buy that dream house or future car with ease of mind.
We’ll start with buying an automobile. What are the essential pieces of information you should know? First and foremost, what is your credit score? This will be a significant factor and, in some cases, will determine whether or not you’ll be able to purchase the car.
How can you check your credit score? Every 12 months, you are allowed one free credit score check by the three major credit score companies by visiting www.annualcreditreport.com. This will help gauge how you can proceed with either choosing the car, how to negotiate at the dealership, and where you stand against the average buyer. Suppose dealerships find that you have a very high credit score. In that case, you can negotiate the best deals and get any car fairly easily. On the contrary, with a low credit score, the interest payments will often be high, and you may be turned away with one look at your number.
The next thing you should know is what your budget and financing options are early on. Many people use a trick to go to the dealership and look at the sticker prices, figure out what down payment you can work with and what type of monthly payments you’re hoping to achieve. Doing this beforehand can help you prepare your finances, determine what you can afford, and manage your expectations when choosing a car. Many people buy cars that are out of their price range, which can easily ruin their credit and cause more stress on other monetary responsibilities.
Another vital factor to look at is what price other dealerships are selling their vehicles. Dealerships often have different prices for the same cars. This is because they are third-party sellers and don’t sell at the preset price set by the car manufacturer. Try to aim for 5 or more dealerships and scout out which has the lowest price. Talk to the agents there and see the lowest offer they can provide on initial discussions. Then with that information, you can add in your credit information and find out what your financing plans will look like for the next 12-36 months, depending on your payment choice.
When buying a used vehicle, a major thing to check is the Carfax report. Whether going through an individual or a dealership, you should always ask to see the vehicle's record history. Doing this will help you gauge how to negotiate the price for the car and whether or not the car is worth purchasing.
Lastly, another critical piece of advice to know before buying your car is a relatively simple one. Test drive the car. It seems like such a standard piece of advice. However, test driving your car is extremely important. There is a lot of information about a car that you can understand from the driver's seat. How balanced the car is, whether the engine runs smoothly, if the car itself shakes or rattles when reaching a certain speed, how the brakes are, and a lot more. Using these five tips, though, will allow you to have the proper knowledge about the car you want to purchase, be able to plan, and overall have a successful first buy!
Now we will move on to another important first purchase, your home. Purchasing a home is often much more expensive and much more stressful than buying a car. With loads of paperwork, dealing with neighbors and HOA, agent fees, property taxes, and many other small nuances, purchasing a home can be a headache. That’s why we will help outline the essential tips to get you started on living that American Dream.
First things first, find a trusted realtor. This should be a priority because depending on what the market looks like, the investment you’re putting in could end up losing a lot of equity. Talking to trusted realtors can help you determine when to buy a house. In addition, hiring an agent will guarantee that the realtor will be working for your purchasing side more than the seller’s side. Having a realtor who knows the ins and outs will allow your buying experience to run incredibly smoothly and give you peace of mind.
Next on the list is to understand where you want your future to be. It may seem odd, but understanding your future, such as having kids or moving jobs, can better prepare you for uncertain circumstances. Always keep these in the back of your mind when buying a house. If you eventually move from your first home you may not have paid down any real equity because of your mortgage. This can make buying a new house much more difficult. Unless you see yourself living in your first home for a fairly long period of time, keep searching for a more reasonable option.
The third tip you should know is to consider your current debts. About 1 in 8 individuals in the US are struggling with student loans. You may not have student loans, but maybe you have car payments, health insurance, and other small or large payment plans concurrently. Look at your finances and be sure you can manage a mortgage before rushing into that American Dream. People often get their houses repossessed back to the bank because of default or many late payments. In addition, before buying a house, it’s wise to have an emergency fund that you can use if you lose your job or a housing market crash occurs. Planning for the future will be your best bet when buying your first house.
An obvious next choice based on the previous list would be to check your credit score. Like the car purchase, your credit score is just as valuable, if not more valuable, because of the price difference between the two assets. It can be challenging to find mortgage lenders that will give you loans without a good credit score. Homes are much more expensive, causing credit scores to be scrutinized extensively along with your income statements and your current payments on other misc. items and assets.
Lastly, don’t get too attached to your list of must-haves for your home. As you narrow your search further with your list, it becomes more difficult and much more expensive relatively quickly. Keep an open mind and remember that cosmetic changes can be made in the future. For example, a house without an attached garage can always be modified later.
When purchasing your first home, stick to two or three absolutely must-haves because that’s more realistic for most people’s price ranges. This will likely not be your last house, so don't stress about the small things such as cosmetics. Most people don't find their dream home until many years down the road, and worst-case scenario, you can always wait to find a home that meets your criteria. Hopefully, this list can help you get started on buying a vehicle, a home and bringing you one step closer to that American Dream!