Questions to Ask When Buying a House

You will be full of questions to ask when buying a house, and you shouldn't be afraid to get answers. First time home buyers need to be actively engaged in the real estate process so you can get the best house you can at a price you can afford. Here are some of the major questions that you should be asking yourself along the way:

Can I really afford this house?
Use an online calculator and find out how much you can handle per month. Be realistic with the numbers. It is all too easy to plug in the numbers you wish you had in order to get your dream house in a dream neighborhood. For an easy, but rough estimate, multiply your household income by 2.5, and that's how much you can afford.

Then consider how much down payment you can offer. The more, the better because anything under 20% means you will have to pay for private mortgage insurance or get a piggyback loan on top of your regular mortgage loan.

As a last step, take a look at the overall stability of your finances. Are you confident in the state of your job? Are you confident in the state of your partner's job? Do you have any lingering debts? Have you set up an emergency fund for any surprises that don't involve the house?

How does the cost of the house compare to my rent?
At first, it might seem that buying a home is cheaper if your monthly mortgage payment is less than your rent. But don't forget everything on top of that, such as homeowner's insurance, property taxes and even lawn care. It all adds up.

Can I handle maintenance?
Are you really ready for the DIY life, or have you been watching too many home-repair shows? Look back on the last time the garbage disposal burned out. In the past, you could call your landlord, and the problem would be magically solved, give or take a few days. But now, when that sort of problem arises, it is your problem and you have to pay for it. And what about mowing the lawn if you want a house with one? Are you ready to get a lawnmower, or will you hire someone to do it for you?

How is the neighborhood? What is nearby?
Ideally, you will be in this home and in this neighborhood for several years. You will be shopping at the neighborhood stores and eating at the neighborhood restaurants. Take a look at the amenities and how close the must-haves (hospitals, fire, police) are. Visit the neighborhood at different times of the day to gauge the noise level, especially if you like it quiet. Read up on the history of the neighborhood for crime statistics, zoning information and vulnerability to natural disasters.

How are the property taxes?
Property taxes can be a tremendous cost to homeowners, but they vary from place to place. Are they high, and is that reflected in the quality of life in the community? High taxes aren't always a bad thing; they can signify a high quality of life, if the taxing authority spends them well. A difference in property taxes and how they are spent may make a difference in where you want to live.

Am I ready for the commitment?
You asked this when you were dating, and it applies to getting a home as well. This question will depend on your career or your spouse's career. Some companies tend to move their employees around on a regular basis. If a move is likely within one or two years, then you are better off waiting until you really need to move because the closing costs, agent expenses and moving bills will cut into any profit you might make from selling.

How much are the closing costs?
When people budget for buying a home, they often forget closing. During closing, everyone involved in the sale comes together to sign the paperwork that makes you the new owner of the home. The cost of closing can be three to five percent of the loan.

No matter how annoyed your agent, your spouse, your mortgage lender or sellers may seem, you need to get satisfactory answers to all these questions before you proceed. Only then will you be sure that you are making the right decision.

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