Buying your first home can be intense. It can not only be one of your largest investments in your lifetime, but might be one of the biggest responsibilities that you take on also. You first consideration should be weighing your options in regards to renting or buying.
You then want to talk to a trusted mortgage professional in regards to your financing options, your goals, and any questions that you might have. This loan officer should not only tell you what you can qualify for, but make sure that you will be able to handle this type of transaction.
One of the biggest issues that I have seen when sitting down with someone prior to purchasing a home is that the consumer doesn't have much money to work with or wouldn't have any cash left over after buying their dream home. Sure, so many of us want what we want at that moment without thinking about the near future. I can understand it, I have done it myself. But there are a lot of responsibilities when buying your new home. It doesn't matter if your home is new construction, 5 years old, or 50 years old, you should always have a separate banking account just for your home.
There are many types of costs that can take place after buying a home.
- Routine maintenance can be costly and add up. Cutting of the grass, painting, landscaping, and basic remodeling.
- Unexpected costs -- Roofing problems, plumbing, electrical, and any home appliance. These can be very costly and happen at any time, especially when it's least expected.
- Property Taxes -- Taxes can increase at a moments notice. I have seen some taxes in a certain area rise over $150 a month just in 1 year. Is this kind of increase in your budget? This can especially happen when buying new construction. Leah Ross talks more about this in this post, Escrow Pitfalls with Property Taxes.
There are so many positives when buying a home.
- It's an investment. You aren't paying someone else's mortgage. When you buy a home, your mortgage payment goes to building your wealth. It can be like a 401-k plan per se.
- You can decorate your house in any manner that you wish. If you want to punch a whole in your wall, you can, because you own it.
- Your mortgage interest is tax deductible. You will get a statement at the end of each year showing the interest that was paid year to date. Speak to your accountant on how this can benefit you.
Overall, the purchase of your new home is yours and there is a sense of security when owning your own home. As a renter, the property that you rent in could always be sold. If this were to happen, you could be evicted.
Summary : As American's, so many of us have different spending habits. Even if you want to get into the house with little or now money, make sure that you have some sort of savings set aside for any home emergency. It's always a good idea to have 1 months mortgage payment set aside for that emergency. So many things could happen. Loss of job, loss of income due to an unexpected illness, delayed pregnancy, or anything else that could happen. Word to the wise : When buying, you want to be able to afford the payments without struggling monthly.
The first two cartoons are courtesy of : www.columbusrealestatevoice.com
The 3rd cartoon is courtesy of : www.abc.net.au/reslib/200703/r133868_449224.jpg
The First Time Homebuyer Series :
- First Time Homebuyer Tips : FHA, is the best mortgage program? -- Best Programs & Why -- Part 3 of 4
More information when shopping for a mortgage :
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For more information on FHA loans, please go to this link. The FHA Expert You can also go to this group : The FHA Mortgage Group
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
Copyright © 2007 by Jeff Belonger
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