5 Important Things to Consider Before Buying a Home

Important things to consider before buying a home

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In today’s economy, with interest rates being so low, owning a home is often as affordable as renting. Does that mean you should jump in at the first opportunity you have to buy a home?

Believe it or not, not everyone is cut out to be a homeowner. While owning a home may seem like a no-brainer, buying a home is most likely one of the biggest financial decisions you will make in your life, and there are many things you should consider before taking that step.

Things to consider before buying a home #1

Are you ready for homeownership?

I purchased my first home when I was 18 years old for $19,550. It was, as I would discover, a fixer-upper. At that time it might as well have been $19 million and seemed like a lot of money. My mortgage payment, however, was only $60 more than what I was paying for my rental apartment.

I had a sense of pride that many first-time homebuyers feel when they purchase their first home. I had my own space and the freedom to do what I wanted with it. However, a funny thing happened on the way to being a happy homeowner. I simply was not ready to own my own home.

My first day in my new home included a plumbing repair that took three days to resolve and cost more money than I could afford. I would learn that there is more to owning a home than just being able to make the mortgage payment.

I was not prepared for the time and money upkeep and repairs. I would keep that home for three years. My second home purchase was seven years after my first, and I was better prepared to be a homeowner.

Make sure you are ready to be a homeowner. Investing in a home and building equity is still a good way to add to your personal net worth.
Buying a home is still a good investment; just make sure it’s the right time for you to make that commitment.

Things to consider before buying a home #2

Do you know where you want to live?

There really is nothing more important when buying a new home than choosing the right location. As much as possible, try to envision what the neighborhood where you are buying will look like in five years.

This will help you to determine the future value of your property. Take a good look at the homes in your neighborhood. Are they well kept?
There’s nothing more frustrating than taking care of your home and watching your neighbors neglect theirs.

If you have children, obviously you will want to consider what schools are in the area. As well, how close is your new home to your workplace?
Above all else, choose a neighborhood that fits your lifestyle and personality.

Things to consider before buying a home #3

What kind of home suits your needs?

Now that you’ve decided you want to own a home, and you figured out where you want your home to be located, it’s time to determine what kind of home best suits your needs.

Some homeowners choose condominiums and townhouses, while others prefer a detached home. Each has its own benefits and drawbacks.

Condominiums and townhomes often have homeowner’s association fees and in some cases don’t make as good of an investment as a home.

However, there are advantages. Generally you won’t have to worry about maintaining the exterior of your property or the surrounding landscape. Condominiums and townhomes are often more affordable than purchasing a home.

For most people buying a home is buying a house. The house is often the most expensive option in terms of purchase price and upkeep, but the benefits far outweigh any negatives.
The privacy, independence and security a home offers makes this option the most popular.

Things to consider before buying a home #4

How much home can you afford?

Figuring out how much home you can afford and how much home you actually want is likely going to be significantly different.

This is a step you should complete yourself.

Don’t let anyone tell you how much home you can afford. Figure out a price range, a low-end and high-end, and start shopping for homes on the low-end.

• Determine what your household take-home pay is after taxes.
• Make a list of your monthly household expenses
• Make a list of expenses that you will add as a homeowner

Once you determine the difference between your expenses and your take-home pay, you will know how much you have left to spend on your home.
Hint: Don’t be tempted to count on future income increases to catch-up with a home you can’t afford now. Been there, done that. Doesn’t work.

Things to consider before buying a home #5

Can you get a mortgage?

The worst part of buying a home can be the mortgage process. The stress it creates can be unbearable. Oftentimes, homebuyers try to qualify for a little more house than they can get approved for, and set themselves up for disappointment. However, there is a way around this disappointment.

Getting preapproved for a mortgage is a straightforward and easy process. Simply call a few lenders, give them some personal information about your finances and any necessary documentation to support your statement.

Generally you will have an answer rather quickly. This process will put in place the parameters you will need as you begin looking for your new home.

What if you don’t have great credit? The first answer to this question is, you are not alone. Dings in your credit report are not a death knell when it comes to purchasing a new home. Be prepared to document and explain why those negatives may be on your credit report.

Lenders make money when they sell mortgages and at the end of the day, lenders want to know two things:
1- Do you have the financial ability to make your mortgage payments?
2- Do you intend to do so?

If you plan on buying or selling a home, visit ComFree.com today!

2 comments

  1. Gerald Bass says:

    Great read. I agree with everything on this list. Especially the first point, “are you ready for home ownership?” I think this is something that a lot of people passover in the excitement and allure of owning a home. Many people become fixated with the idea that they7 need to own, as opposed to seeing their money go nowhere when paying rent. However, owning a home is a BIG deal and comes with a lot of considerations that we realistically may not be ready for.

  2. Bryon says:

    Good post. This line “Do you know where you want to live?” attracts my eyes because it is very important that you would know the place where you want to live and the community that you will be living with. Be sure that it’s a safe place for your family.

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