Are you thinking of buying a house? Have you thought about all of the expected and unexpected costs? (Of course it won’t be the white house or anything)
I bought my first house almost 2 years ago. There were many costs that I didn’t expected, but I’m glad that I can afford them.
Tips for buying a house:
- If you are paying rent now, save the difference between your future expected mortgage and what your rent payment is now (example, if your rent is $600 and your mortgage is expected to be $1,000, save $400 every month)
- Understand the FULL cost of your monthly mortgage (Mortgage, home insurance, PMI, and so on)
- If you buy a foreclosed house or a short sale, make sure you get the house fully inspected. I have heard horror stories where the previous owners dumped cement down the sinks and pipes
- I was approved for a $250,000 house and bought a house for $130,000, I would suggest not buying a house for the full amount that you are approved on, as most lenders will approve you for way more than you can actually afford
- It is also recommended that your mortgage not be more than around 30% of your monthly gross income. My mortgage is around 25% of my NET income and around 20% of my gross income
- Try as hard as you can to pay down at least 20% of your house or you will have to pay PMI every month. This can be as much as $150 a month!
What tips/suggestions do you have for future homeowners?
judy says
I think what alot of people forget in the excitement of first buying a house is upkeep of things not just appliances, roofs, your lawn and garden, heaters, water heaters, washers dryers. Also remember utilities while you have more control over them in a home you also have higher utilities. Emergency Funds are important. Judy
Michelle Parker says
I agree. A lot of people don't realize all of the costs that are associated with buying a house.
Anna says
Here is a WONDERFUL calculator that can help people decide whether or not it's worth it to buy a house: http://www.nytimes.com/interactive/business/buy-r…
BTHappyHomeowner says
I saved for all of the things already mentioned, plus I saved $$ for renovations, furniture, and decor. I was extremely lucky with my purchase–my place was a foreclosure and the worst damage I had to deal with was drywall repair and clearing some aquarium rocks out of the disposal. It could have been so much worse but I knew to anticipate some "surprises!" The furniture/reno fund was about $5K and it served me quite well. I'm a huge DIY person, so I didn't pay anyone to do the work. It took me about 2 months to finish everything and I couldn't be happier knowing that my place looks as great as it does because of my own hard work.Also, anticipate potential moving costs!
Michelle Parker says
Thanks for posting the link to the calculator!And congrats on finding a great foreclosure!
South County Girl says
Remember to figure out HOA fees and go to a complex meeting before you buy… It gives you a good insight on how well they are doing financially and what the major problems are.Also, look up the property on the governments site to see the actual tax bill (which is public knowledge) All you need is the property ID number… This way you can see any bonds funds that have been added and if there is any mello-roos associated with the property.You should also look into what repairs are the homeowners responsibility vrs the association so you can be prepared if you need to get those fixed.
Michelle Parker says
Those are really good tips! Thanks for those.
Michelle Schroeder-Gardner says
It was my pen name 🙂