“History repeats itself first as a tragedy, second as farce.” Karl Marx famously said this maxim and 21st century homebuyers can definitely learn something from it. The recent housing bust has brought in some golden wisdom that has been long forgotten ever since the boom in the real estate market. Now that we are experiencing a downward spiral in home values, it’s time to wince at new extravagant practices and welcome forgotten home-buying rules. Even if you’re buying something as grand as Miami luxury homes, don’t forget these heuristic boons to keep you away from miring in future financial scrapes.
Be down payment savvy and save
Even if you have enough equity in your primary residence to cover the mortgage for your Miami luxury home, it doesn’t mean that you have to do it. In contrast, however, being able to put down as much as 20 percent in down payment often pay off in the long run to the tune of better interest rates, lower payments, higher equity and instant resources in case of refinancing. Still, having emergency cash handy and safe, while tying up your equity to a second mortgage, is the safest way to avoid troubles.
Be a smart borrower and never go overboard
Low-risk buyers find themselves able to reach higher mortgage loans for their investments. If you’re one of these homebuyers, always remember to step back and think about the repercussions. These enticing deals often end up doing more harm than good. What you must remember is to only borrow within your means. If you can afford a Miami luxury home without the need for jumbo loans, then avoid high mortgage amounts.
Be a wise investor and put off plans for now
If you’re hunting for real estate investments for a quick buck, it will be tremendously beneficial to defer your plans for now. While the real estate market, including Florida’s, is starting to show signs of life, albeit slowly, this might not be the right time for investing on properties. The market is still too volatile and risky.
Concentrate on the city’s market
Instead of looking at the national housing market trend when buying a Miami luxury home, concentrate on the city’s market. Focus on the factors that greatly contribute to the rise and fall of home values, including crime rates, unemployment rates, foreclosure statistics, number of new homes, and comparable sales analysis.
Mark Michael Ferrer
Miami Luxury Homes
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