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Seek Advice From A Financial Advisor Before Buying A House

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Many people seek help from financial advisors for retirement planning, but this is not the only reason to visit one. Advisors help with many financial situations by providing advice and strategies to improve your financial situation. If you want to buy a house soon, it might be helpful for you to visit with an advisor as they can help you plan for this major event. Here are several things an advisor might recommend as you prepare to buy a house.

Save More Money

One of the things an advisor might suggest is saving enough money for a down payment. If you do not have 20% to use for a down payment, they might suggest waiting until you do. 20% is not a required down payment for a house purchase, but it is a wise move to make. If you want to buy a house for around $200,000, this means having $40,000 to put down. An advisor can review your budget to help you find ways to save more money, if necessary. Most people can save more, but many need some advice to determine how to do so.

Set a Budget

The second thing an advisor can help you with is setting a budget for a house purchase. To set a budget, the advisor will need to review your current one. If you do not have a budget, you can bring a list of your debts to your appointment. The goal of setting a budget for your house purchase is to make sure you buy a home that you can afford. One rule of thumb when setting a budget is to make sure you can afford to save at least 10% of your income afterward. If you cannot save at least this much, you might need to buy a less expensive home.

Create an Emergency Fund

The third thing you can expect is for the advisor to suggest creating an emergency fund before buying a house. This fund is a separate account that you use for emergencies. Many advisors recommend having at least three months of income in these funds, but the amount varies. The purpose is to protect your budget. When you buy a house, you might experience emergency repair bills. If you have an emergency fund, you can use the money to pay for these things.

If you have questions about saving up to buy a house, talk to a financial advisor today.