Although, nearly, everyone, realizes, it takes some sort of financial commitment, to be prepared, in a relevant way, to purchase a home, of your own, few, proceed, to pay keen attention, to everything, involved, and necessary! Most know they will need a down – payment, which, often, is about 20% of the house’s price (however, that amount, may differ, depending on the type, and terms, of the particular, mortgage), but, many, fail to realize, and proactively, plan, for the other financially – related, necessities. After, over 15 years, as a Real Estate Licensed Salesperson, in the State of New York, I have come to, strongly, believe, there are, at least, 5 needed, financial considerations/ necessities, for buying a home. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, these, and why it’s important, for a home buyer, to be prepared.
1. Down – payment: When one uses a mortgage (as the vast majority of individuals, do), the lender will require, a minimum, down – payment. Although, generally, this is 20% of the purchase price, there are many other mortgages, which may, require less (and, certain times, such as non – owner – occupied, multi – family houses, cooperative apartments, etc, where a higher down – payment, may be required). Be prepared!
2. Various reserves: When one buys a home, he seeks the American Dream, but, if he isn’t thoroughly, prepared, and ready, it risks, becoming a nightmare, instead! There are a variety of reserves, wise homeowners, have, including, reserves, for: immediate repairs/ renovations/ upgrades/ re – finishing; moving expenses; appliance repair/ replacements; HVAC – related issues, etc; exterior/ interior painting/ maintenance; anticipated replacements/ repairs/ renovations; unanticipated maintenance/ repair; upgrades, etc.
3. Personal comfort zone: Each buyer, should/ must, determine, for himself, his personal comfort zone, in terms of the financial necessities, of home ownership! No one wants to add, unnecessary stresses, etc, so the more one knows, and the better – prepared, the less, the hassle, and discomfort!
4. Total monthly payment: Many things go into one’s total monthly payment, related to his home. Mortgage payments, often/ generally, include: principal; interest; real estate taxes; and escrow items (such as insurance, etc). In addition, consider costs of utilities (including, electric, heat and air conditioning expenses, cable, Internet costs, etc). Prepare, both, for the regular ones, as well as, the unanticipated expenses (such as repairs, replacements, plumbing, exterior maintenance issues, etc)
5. Job security/ Personal financial confidence: Do you hope to stay, in this area, or, are you, uncertain? How secure, are you, in your present job/ occupation/ position? Are you, ready, willing, and able, to proceed, forward, in a financially, responsible/ responsive manner? Do you believe, you are ready, and fit, for the financial aspects of owning a home?
If one prepares, financially, and carefully, for both, the anticipated, and, unforeseen, expenses, related to home ownership, the process, will be, easier, less stressful, and generally, happier, and more satisfying! Will you proceed, wisely, and in a prepared manner?