5 Questions to Ask Before Buying Your First Home
Making the leap to home ownership can be scary and exciting all at the same time. Consider these five questions before you buy your first house to ensure you are financially prepared for the costs of home ownership.
1. Have you saved a down payment?
The typical down payment on a home is 20%. There are programs that allow you to buy a home with a smaller down payment, but you’ll want to check with your lender if PMI (private mortgage insurance) is required. PMI protects the lender in case you don’t
pay, and can add a couple hundred dollars to your mortgage payment amount.
2. Will you be happy to stay in the same house for many years?
3. Are you handy in repairs and maintenance?
- Are you planning on having children? Will there be enough room for a growing family?
- Are your children growing up? Maybe you’ll want a smaller space when your children leave home.
- Do you have aging parents that may need to stay with you?
- Do you like the neighborhood/area? Are there other families similar to yours? If you have kids, are there other kids in the neighborhood?
Choosing a newer home instead of an older one may be better if you don’t have a handy bone in your body. With a newer home, there will be less maintenance issues to tackle. But don’t let that deter you from buying an older home if that’s what you like.
Just make sure you are able to afford paying someone to fix things if/when they break.
4. What will it cost to live there?
Even if you have no problem affording the mortgage payment, don’t forget about other ongoing expenses. Property taxes and insurance rates are usually added into your monthly mortgage payment. Depending on where you live, these can add a big chunk of change
to your payment.
5. Do you have an emergency fund?
If you are buying a home, you need an emergency fund. When you rent, a quick call to your landlord will get a repair completed. When you own a home, it’s your problem to take care of, so you need an emergency fund to pay for repairs when something goes
wrong, along with other unexpected expenses that come with home ownership.
Are you ready to buy your first house?
Source & some text adapted from: www.centsandorder.com