In an era of low interest rates and a hot housing market, it might seem like the perfect time to buy a house. For those who have never owned a home before, the thought of home ownership can be exciting. When you are considering purchasing your first home, you need to consider a few things before you take the leap, for example, are you really ready financially to own a home?
Down Payment
Getting approved for a mortgage isn't the only hurdle you will have to face when buying your first home. That can be tricky in and of itself. Do you make enough money and are you a good risk for the bank to take a chance on? There is also the fact of having enough money saved for a substantial down payment.
It may be possible to get approval for a mortgage with a smaller down payment, but the higher you can make it, the more likely you will be approved. It will also lower your payments every month. You also need to think if you will have any money left over once the down payment is paid. You shouldn't leave yourself with no savings when buying a home.
Closing Costs
For new home buyers who have no experience purchasing a new home, they may not realize that the down payment isn't the only expense in buying the house. You must also have enough money for the closing costs. These will include lawyer's fees, insurance, taxes and land transfer taxes (should your town or city have them.)
Monthly Mortgage Payments Plus Other Expenses
When you rent many apartments, utilities are included in the rental price. When you buy a home, you not only need enough money for the monthly mortgage payments, but you need enough to cover insurance, utilities, property taxes and furniture.
You need to have funds to cover your food, transportation costs and if you own a townhouse or condo that requires maintenance fees - these cover landscaping and snow removal and in some cases your utilities, you need to have those too. At the same time, you should have enough left over to put into a savings account and/or emergency fund in the event something unexpected happens such as an illness or job loss.
Landscaping and Maintenance of Property
One thing you need to consider is if you have the funds to pay for landscaping of your lawn including grass cutting, weeding and if you wish, to have a garden. You also need enough money to pay for the upkeep and maintenance of the home. This includes fixing leaking problems, fence repair and general wear and tear of the property.
To learn more, contact a company like Woods Bros Realty.
