Biggest Purchase is not your home!

Buying a home along the Main Line and throughout the country, or selling a home are often referred to as being one of the largest personal transactions most individuals will handle. I was a reading an article this week and it challenged this assumption on the grounds that when you buy a home there are actually TWO transactions and the home is often not the largest.

Well, I got to thinking about this and before long decided the writer was wrong in their choice of words, in that when you buy a home there are many more than two purchases. I agree there are two very large purchases, and the home is not the largest, and I will get to what the largest is in a minute.

For example if you use a real estate agent this is a purchase, you ultimately pay for their services, even if the HUD sheet shows the fee being paid by the seller. Think for a minute where those funds came from, you, right, so who paid the commissions?

Then you purchased title insurance, and don't believe anybody who tells you all title insurance is the same price in Pennsylvania, attorneys are able to offer a discounted rate and whilst you need to check their other pricing it may save you some money.

You had a home inspection, which might have included Radon and Termite as well, maybe you had the boundaries inspected, possibly you needed to contact a roofer, HVAC contractor or chimney sweep for a more in depth inspection following your initial home inspection, maybe the lateral sewer lines needed to be inspected.

Then, once you were moving towards settlement, you shopped for furniture, paint, garden/yard items etc. It is far more than just one or two purchases.

But if the home is not the largest purchase what is? Your mortgage possibly depending on its size in comparison to the cost of the house. For most people it will be, and if you don't pay close attention you can end up paying much more than necessary for your loan. People will often get hung up on small things like fees when they need to look at the term of the mortgage and the rate, you can save tens of thousands of dollars over the life of the loan with just a small adjustment to you interest rate. The same goes for making bi-weekly payments, or making one extra payment a year towards principal, there are many ways in which you can save. It may make sense to have a ten year adjustable rate mortgage if you intend to move within 5-7 years perhaps. All of these things should be discussed with your mortgage broker, so it is important who you choose for this, not just the firm advertising the lowest rate on-line who will sell the loan even before settlement and will not be at settlement either.

So ask your real estate agent for referrals, we all know who is local and reliable, who puts their clients interests before their own and who will come to settlement, so if there are problems they stand by their work and sort it out.