For many Americans, buying a home is a passage. It is a symbol of independence and economic stability. But there is a lot to think about before investing in home ownership.
Cultural symbolism aside, there are practical aspects to consider. For example, a homeowner invests the money she would otherwise spend on renting a property she can later sell or hand over to the heirs. A house usually offers more privacy than an apartment or apartment.
However, buying a home is an important financial decision. For most, it is the biggest purchase they have ever bought. If you're ready to take the next step, it's important to consider a few things.
Buying a home is not just about the entry price. Here are some financial things you should do before signing up on the dotted line:
- Maximum monthly payment: Most financial experts recommend that the maximum monthly payment on the property should not exceed 25-28 percent of the total month income. So, if you bring $ 5,000 a month, you should aim for a $ 1
- Private Mortgage Insurance: If you do not have at least 20 percent for a down payment, the lender requires you to have private mortgage insurance (PMI). Most lenders add to the PMI payment amount in the mortgage payment. Make sure you know how much this is so you can include it in your budget.
- Maintenance: When you live in a rental, your maintenance responsibility and your costs are minimal. Once you have purchased a home, you are fully responsible for leaky roofs, cracked pipes, broken water heaters, workshop and other repairs. Adding a cushion to your monthly budget will help you save on these unexpected expenses.
- Tools: Depending on where you live, you may not already be responsible for all your tools. Property owners pay for electricity, gas, water, sewage, garbage disposal and property tax. Some districts also require recycling fees.
- Homeowner's Association Fees (HOA): Neighborhoods with HOAs charge fees that can range from $ 25 to hundreds of dollars per month. These fees usually cover the cost of neighborhood facilities. Sellers need to state if a home is part of a HOA. However, they may not be required to provide monthly fees or rules, as HOA statutes are available through public records.
The Pragmatic Things
If you're comfortable with the financial aspect of buying a home, and the next thing to consider is all the pragmatic things you need to know, including:
Location: House prices may vary based on location. Limiting the neighborhood where you want to live can make it easier to find your dream home. If a specific neighborhood is not that important, saving your home to more can include thousands of dollars.
The size of the property: How many bedrooms do you need? Can You Need More In The Future? Can you stay in a bathroom? Want a garden? A large garden may seem appealing when you look at a property, but you need to maintain that lawn. Make sure you think about actually living in the house and not just the aesthetics.
Crime rate: In most states, real estate agents are not legally obliged to disclose crime rates for certain areas (and they cannot post them on their websites, either). If you want to know how safe a neighborhood is or what the school's ranking is, you need to examine it yourself. Some useful websites include great schools and city data. You can also check the website of the Crime Reports Department.
Age of the property: Older homes are likely to have major repairs, especially if they have not been updated recently. If you have seen any home renovation show, you know that many problems arise in older properties. Here are some things to look for and be aware of:
- Old wires
- Ungrounded outlets
- Delicious ceiling or windows
- Poor insulation
- Foundation problems
- Home built before 1978 should be tested for lead paint.
- Houses built before 1986 may have lead pipes.
- There may be asbestos in homes built before 1980.
Older homes have character, and many of them were built with artistry you won't find in newer models. Just be aware that if you invest in an older home, you may want to spend more money on updates and repairs in the future.
Renovations: If a property owner refurbished a home, make sure they provide documentation proving that they got the right permits. If you purchase a home with non-permitted extras or renovations, you will be held liable for the higher taxes or other fees required to bring the renovation up to the code.
Will your furniture fit? There is nothing more frustrating than moving into your new home just to find the happiness that has passed for generations doesn't fit … anywhere. Whether viewed by a budget for new furniture, or be more strategic under the house hunt to avoid this headache.
How long do you plan to live in your new home? If this is your eternal home, then buy for the future, not just today. Look at everything from the perspective of how your family can look ten years from now. Thinking about the future can prevent your dream home from becoming a nightmare later. Here are some other things to consider in the long term:
- Regulation and Development: This may be something you can't control, but you should look into it. Are there any major developments planned in the area? Will traffic on the road increase due to a larger project planned by the city? Are you willing to cope with construction or increase traffic?
- Investment Potential: Does this property have the potential to increase value? If you land a nice home at a lower price, you can increase your equity quickly if the market changes. Similarly, if you pay too much on a property, you can lose money if the market changes in the opposite direction.
Buying a home is an important – and expensive – decision. So take your time, examine a little, and narrow down what you want, so don't regret your purchase a few years in a row .