5 Things to Know Before Buying a Home

This is a guest post from Kalyn of KalynBrooke.com

Although everyone has their own idea of what the American Dream really looks like, you can’t deny that for many, homeownership is toward the top of that list. There’s something incredibly satisfying about buying your own place, making it yours, and taking responsibility for the repairs and upkeep. Okay, maybe not so much that last one, but you know what I mean!

However, the home-buying process can be pretty complex, and for first-timers, it’s hard to know exactly how to navigate in between interest rates, inspections, and negotiating a great deal.

After purchasing two separate homes in the past 5 years, I’m nowhere near an expert, but I have learned a lot along the way. If you’re thinking of taking the leap into homeownership, this post will help you get it right the first time. Although, these principles are a pretty good reminder for those getting ready to buy again too!

Be Sure of Your Investment

A home will be one of the biggest purchases you’ll ever make, which means you should consider ALL factors that come with owning a piece of property, not just the purchase price.

For instance:

• Unless you’re absolutely certain you’re ready to put down roots and stay a while, owning a home might not be the best investment. Any less than 3 years in a home {as a general rule} means you’ll probably lose money when you sell it.

• You don’t have to be an economy expert, but you should have a general idea of where the housing market is headed. No, you can’t always predict what’s going to happen {i.e. the 2008 crash}, but depending on interest rates and housing prices, you may want to hold off…….or jump right in.

• Owning a home, albeit a bigger one, doesn’t just come with a monthly mortgage, it also comes with larger utility costs, maintenance, and repairs. Are you prepared to handle them? Make sure you have enough room in your budget to accommodate these extras.

After you’ve weighed all the costs versus benefits, and still believe owning a home is the best course of action, it’s time to move onto the next phase — house hunting. But there’s a few things you should know about that too.

Location Really Does Matter

I’m sure you’ve heard the over-used phrase, “Location, Location, Location”, and wondered if it was really true. I personally cannot harp on location enough! Because you can’t change the location of your home, short of selling it and moving to another area, you have to make absolutely sure you get it right.

A great way to start if you’re not familiar with the area, is to search the local news online archives for street names and neighborhoods. If a major crime happened there, you bet the news covered it. And while it doesn’t have to completely rule out a section of your town or city, it will help narrow down the options.

Another cause for concern, particularly if you live near the coast, lake, or river, is flooding. Get a hold of flood maps {you can find most of them online} to get a general feel of where those sections are. Again, it doesn’t have to rule out the home, but it will determine whether or not you need to add flood insurance as an additional cost.

Lastly, ask yourself if you can be happy with how close the home is to other homes. Do you want a big backyard? Could you add a fence for privacy? Generally, the closer you are to conveniences, the less space you’ll have outside, and vice versa. Determine the top 3 non-negotiables, then get as close as you can to meeting them.

Don’t Be Concerned with Cosmetics

Every time I watch HGTV and see a couple who can’t stop talking about the awful paint on the walls, I want reach through the screen, put my hands on their shoulders, and tell them paint does not matter. Paint is easily changed! They are letting color or the way the home is styled to affect and “blind” them to what really matters.

A good home should have good bones. Meaning, the structure, foundation, and roof should be your primary concerns. Then comes layout. Does the home have a good flow? Does it function the way you need it to? If not, is that something you can live with for now, but may want to change down the road?

Realtors can sell you on any home, so make sure you know ahead of time exactly what you’re looking for. And don’t let the cosmetics sway you, whether they’re good or bad.

The Banks are Not Your Friend

If you’re able to pay cash for your home and bypass a bank, do it. But for the rest of us, we don’t always have that option. In that case, it’s good to go into a bank and request a mortgage with as much information known beforehand as you can, because sometimes banks will take advantage of you!

From my experience, banks have always tried to push Adjustable Rate Mortgages {ARMs} over Fixed Rates, which means you might get a really good rate now, and even better if interest rates continue to lower, but you can never guarantee that will happen. On the other hand, banks are betting that interest rates will go up, so you owe them more interest over the life of your loan.

Another thing banks often do is approve you for a higher mortgage amount than you can reasonably afford. Remember, they are doing this based on estimates that you give them, and can’t possibly know every little expense you have. Go through your budget and come up with a monthly mortgage number that is comfortable and doable for your current finances. Then play with an online mortgage calculator to find the average price you should be looking for.

Expect the Worst

I don’t mean to be all doom and gloom, but when you’re in the fog of buying a dream home, you forget about all the responsibilities that come with it. When you buy a house, you also buy the responsibility to repair and maintain anything that breaks. And yes, things will break! And always when you least expect it.

Rather than invest any extra money in new furniture or a shopping spree at HomeGoods trying to get your home “just perfect”, set aside a portion of that money {at least $1,000} for an Emergency Fund.

This doesn’t eliminate the frustration when the air conditioner breaks or you have to replace an appliance, but knowing you have money set aside to cover or help with expenses is a real comfort, and will save you from a bigger financial catastrophe in the long run.

While it might seem like owning a home is the next step for you, I would be remiss to at least acknowledge that renting does have it’s perks. Depending on lease, you can easily pick up and move somewhere else. You also don’t have to maintain the property or fix repairs, thus leaving more time to spend with your family, doing what you love.

But there is also that sense of pride in having a place that is yours to do with as you please…..to work on with your own two hands, and create a cozy haven where families can gather and can become your refuge. So if you’re in, go all in, but now you know ahead of time what to expect!

 

Kalyn Brooke is a life management expert for busy women who crave a simpler and more organized life. Through her recognizable, down-to-earth approach, she provides a daily dose of inspiration and guidance, whether you’re looking for smart money tips, time saving routines, or anything in-between. When she’s not experimenting with ways to do even the most mundane tasks more efficiently, you can find her crafting detailed to-do lists in her bullet journal, or indulging in—yet another—personal development book. Meet Kalyn and learn how stay on top of it all at KalynBrooke.com.