Written by Morteza (Morty) Sadeghi
Buying a house is one of the biggest financial investments you’ll ever make and at the center is the mortgage that will dictate how a large portion of your money gets spent while you live in the home. Terms and concepts like mortgage rates can wait until you get further along in the process. At first, you need to concentrate on making sure you know what you need to do before you even start applying for a loan.
First off, it’s best if you know exactly how much money you’ve got to deal with and that means putting together a monthly budget. It’s as easy as subtracting all your expenses from your monthly wage, or so it might seem. First time homebuyers need to keep in mind the move from renter to homeowner also necessitates some changes to those monthly numbers. A host of different and new expenses will need to be added like utilities and property taxes.
There’s more to consider. A new home has many moveable parts you didn’t need to account for when you were renting and these include any number of things that can go wrong and need to be repaired or replaced right away like the roof, plumbing fixtures and even the appliances. Putting a little extra money away in some kind of emergency fund is a great idea even if you can only afford to sock away a few bucks each month. Keep in mind there’s no landlord anymore to look after these important items for you when you call for help.
Finally, although it might seem like something that can wait for a time when you’re more settled, at least thinking about some renovations in important areas like the kitchen and bathroom will ensure your house holds its value and the equity increases as time goes by.
