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How to Prepare for the Home-Buying Experience

17 March 2020

Cody Day

Buying a home is a big decision and starts an important chapter of your life in which you can establish roots and build equity in real property. But before you can jump in head first, you need to think about some of the upcoming responsibilities and the financial side of buying and owning a home.

Here are a couple of tips for you to think about when you have decided to buy a house.

Consider Home Ownership Responsibilities

One of the first items to consider is all the new types of responsibilities you need to be aware of and make sure you can handle them. With a home you own, you cannot rely on a landlord or maintenance crew to handle repairs or do maintenance on the home's HVAC. If your toilet gets clogged and you cannot unstop it, you will need to call and pay for a plumber to help you.

You will also need to be responsible to pay for the home's utilities, including water, garbage pickup, and sewer costs. Then, if your home has a yard, you will need to take care of the landscaping. Some areas and cities will give you a citation and a fine if you neglect your yard and let it become overgrown or if your lawn dies in summer. If you end up buying a home that has a homeowner's association (HOA), you will need to be aware of all the rules and regulations to keeping up your property and home.

Make a Realistic Budget

Another important tip to help you is to make sure you can really afford a home and all its associated costs. You will need to pay for the home's mortgage payment along with property taxes and the hazard or homeowners' insurance on your dwelling. If your mortgage financing is for more than 80 percent of the property's value, you will likely have to pay for private mortgage insurance to your lender to help insure your loan against default.

To help you make a realistic budget, make a list of all your monthly or annual expenses to see how much you are responsible for paying on a regular basis and subtract it from your take-home income. Be sure you include less-common or unusual expenses, such as annual professional subscriptions and charitable donations you always make. Then, be sure to account for dining out, personal care expenses, such as hair care and beauty, and investing in a savings account or an IRA account. 

Be sure you can still comfortably put money aside for a rainy day emergency fund because when you own a home, you need to be ready to replace appliances you rely upon that might go out, such as your water heater or fridge.

To learn more about real estate, talk to an agent in your area.

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