PROGRAM Realty Blog Important Questions First-Time Home Buyers Should Ask

Buying a home is an exciting process, especially for first-time home buyers. Unfortunately, however, too many first-time home purchases end in financial disarray, especially if the decision to purchase was made too hastily and without careful thought to all aspects of home ownership. If you are preparing to purchase a home soon and would like to make sure that you are ready for home ownership, taking the time to ask a few good questions before buying can be the best way to avoid future problems and ensure that owning a home remains a truly positive experience. How Much House Can I Afford? When buyers think about buying a home they often focus solely on the amount of the monthly mortgage payment they will have to make. But the monthly mortgage payment does not include other costs involved in purchasing a home, including: down payments closings costs home owners insurance premiums inspection bills and the cost of repairs, in some cases moving costs utility hookups any repairs, renovations, furnishings, or appliances needed before the home can be lived in Since some of these costs can be significant it is important to also include these costs when computing the actual amount buyers can afford to invest in home ownership. Underestimating or forgetting about closing costs and other big purchases up front can leave a buyer strapped for cash when it comes time to pay for things other than the home, especially right after moving in. What are the Recurring Monthly Costs of Home Ownership? In addition to making sure that the homes monthly mortgage and interest payment is affordable, buyers should also research and carefully consider any recurring monthly expenses that will be associated with living in any home they are considering. These recurring costs typically include utilities, private mortgage insurance (if you do not put down 20), home insurance premiums, homeowners association fees, and in some cases, property taxes (if they are divided into monthly payments). Some ideas for keeping these monthly recurring costs as low as possible include: putting at least 20 down on the home to eliminate PMI costs choosing a home with good insulation R-values, a high-efficiency heating and cooling system, and a historic record of affordable utility costs choosing a home in an area with no or low homeowners association fees and lower-than-average property taxes What are the Expected Maintenance and Renovation Costs? Maintenance and renovation costs can be an challenging part of home ownership that buyers must be prepared to handle. At some point or another, furnaces will fail, roofs will leak, and the refrigerator will die, so homeowners must be prepared to handle these costs without creating financial difficulties and stress. While any type of unexpected maintenance problem or renovation issue can be annoying, buyers can prepare to eliminate or lessen these problems by: making sure that a complete home inspection is performed by a reputable home inspector under the inspection contingency of their purchase contract having their real estate professional assist them in successfully negotiating with the sellers to address any repair or renovation issues noted on the inspection at seller cost budgeting to save a specific amount each month to pay for future repair or renovation needs having major systems of the home, such as the heating and cooling system serviced regularly to extend their lifespan and bolster efficiency For help with these questions or others, buyers should always choose to discuss all aspects of home ownership with their real estate professional before moving forward to sign a purchase agreement. Their agent can often help them to select a home that will be the best possible fit for their budget and housing needs, both now and in the future.