For many Americans, buying a home is a rite of passage. It is a symbol of independence and financial stability. But there is a lot to think about before you set off for homeownership.
Apart from cultural symbolism, there are some practical aspects to consider. For example, a homeowner invests the money he would otherwise spend on the rent into a property that he can later sell or leave to his heirs. A home usually also offers more privacy than an apartment or condominium.
However, buying a home is an important financial decision. For most people, this is the largest single purchase they have ever made. When you're ready to take that next step, it's important to consider a few things.
Buying a home is not just about the list price. Here are a few financial things that you should work out before you sign on the dotted line:
- Maximum Monthly Payment: Most financial experts advise that your maximum monthly payment for living space is 25-28 percent of your total monthly amount should not exceed income. So, if you bring $ 5,000 a month home, you should aim for a home payment of $ 1
- Private Mortgage Insurance: If you do not have at least 20 percent for a down payment, your lender requires a Private Mortgage Insurance (PMI). Most lenders add the PMI payment amount to your mortgage payment. Make sure you know how much this is so that you can include it in your budget.
- Maintenance: If you live in a rental apartment, your maintenance obligations and costs are minimal. Once you have bought a house, you are fully responsible for leaking roofs, cracked pipes, broken water heaters, gardening and other repairs. Adding a buffer to your monthly budget can help you avoid these unexpected costs.
- Utilities: Depending on where you live, you may already be responsible for all of your utilities or not. The owners pay for electricity, gas, water, sewerage, garbage collection and property taxes. Some neighborhoods also charge recycling fees.
- Homeowners Association (HOA) fees: Districts with HOAs charge fees ranging from $ 25 to several hundred dollars per month. These fees usually cover the cost of amenities in the neighborhood. Sellers must specify if a home is part of a HOA. However, they may not be required to disclose monthly fees or rules as the HOA's Articles of Association are available through public records.
The pragmatic things
If you are familiar with the financial aspect of buying a home? Next, consider all the pragmatic things you need to know, including:
Location: Home prices may vary by location. If you narrow down the neighborhood in which you want to live, you can find your dream home much easier. If a particular neighborhood is not particularly important, relocating your house search can save you thousands of dollars.
The size of the property: How many bedrooms do you need? Could you need more in the future? Can you live with a bathroom? Do you want a yard? A large garden may seem attractive if you are looking at a property, but you must look after this lawn. Make sure that you think about the actual life in the house and not just about the aesthetics.
The Crime Rate: In most states, real estate agents are not required by law to disclose crime rates for certain areas (and for certain areas), nor can I post them on their websites. If you want to know how safe a neighborhood is or how the school rankings are, you have to investigate yourself. Some helpful websites include Great Schools and City Data. You can also find information about crimes on the local police station website.
The age of the property: Older homes are more likely to be repaired, especially if they have not recently been updated. If you have seen a home renovation show, you know that many problems occur in older buildings. Here are some things to keep in mind and to note:
- Old wiring
- Ungrounded electrical outlets
- Leaking roof or window
- Poor insulation
- Foundation issues
- Houses built before 1978 should be tested for lead.
- Houses built before 1986 may have lead pipes.
- In houses built before 1980, asbestos can occur.
Older houses have character, and many of them were built with craftsmanship that you will not find in newer models. However, keep in mind that investing in an older house may result in more money for updates and repairs in the future.
Renovations: If an owner has renovated a house, make sure that he provides documentation that proves that they have received the proper permits. If you buy a home with improper additions or renovations, you will be responsible for the higher taxes or other fees required to update the renovations.
Do you fit your furniture? There's nothing more frustrating than moving into your new home, just to find out that the stable passed down through generations does not fit … anywhere. Either budget a budget for new furniture, or be more strategic in your house search to avoid headaches.
How long are you planning to live in your new home? If this is your home forever, buy it for the future, not just the present. Look at everything from the perspective of what your family might look like in ten years. Thinking about the future can prevent your dream home from becoming a nightmare later. Here are some other things you should consider in the long term:
- Zoning and Development: This may be something you can not control, but you should take care of it. Are major developments planned in the region? Does traffic on your street increase due to a major project planned by the city? Are you ready to deal with construction works or an increase in traffic?
- Investment Potential: Does this property have the potential to add value? If you get a nice house at a lower price, you can quickly increase equity as the market changes. If you overpay a property, you can lose money if the market moves in the opposite direction.
Buying a home is an important and expensive decision. Take your time, research and limit what you want so that you do not regret your purchase a few years later .