Buying a home is one of the biggest decisions you’ll make over the course of your lifetime, and you want to be sure you’re going into it with all the information you need. Before committing to a property, be sure to educate yourself on some of the key points of home buying.
What You Can Afford
There are a lot of variables when budgeting for a home, but your lender can help you sort out what the end result will look like before you ever start shopping. Your credit score and income level will affect what you can qualify for, and what your monthly payment will work out to be. When making a housing budget, be sure to consider:
What Your Financing Options Are
Down payment amount
Current monthly expenses
Depending on your income level and the type of property you’re buying, there are a lot of options for financing, and each one comes with its own pros and cons. Find out about HUD programs, FHA loans, and other programs meant to make home buying more affordable. Getting preapproved for a mortgage helps to narrow down your shopping and makes putting in an offer much easier.
The Condition of the Home
Skipping the home inspection can be a big mistake, and result in a major headache if things aren’t as they appear. Get to know the home you’re considering as much as you can so you know what your expenses will look like after you move in. Besides the structural condition of the home, consider the school district it’s in, the length of your commute, and the condition of the neighborhood as a whole.
How to Protect Your Investment
Getting the keys to your new home isn’t the end of your financial responsibility, and there’s more to it than just paying the mortgage. Staying up to date on taxes, homeowners insurance, and HOA fees will protect your investment and ensure that you’ll be okay if something goes wrong. These fees could be part of your monthly mortgage payment, or you could be responsible for them yourself.
Home warranties and mortgage insurance are other forms of protection that may be in place. Be sure to discuss these options with your lender to find out what you’ll be paying for and how much it will cost you. Getting all of these ducks in a row before you purchase a home will let you know what your actual monthly expenses will be and keep you on track budget-wise.