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WHAT TO ASK WHEN BUYING A HOME
Questions you can Ask When Buying a House
I am not going to beat around the bush: Buying a house is complicated. If you don’t pay attention or heed professional advice from your trusted advisor, you could get in so far over your head that you end up broke—or stuck in a home that is not a good fit for your lifestyle. But you can avoid this by asking a few smart questions of your trusted Real Estate advisor!
What Questions Should You Ask Before Buying a House?
To be confident on your journey to buying a home, here are the top questions to ask when buying a house:
- What’s my housing budget?
- How much should I save for a down payment?
- How much are closing costs?
- Do I need to save for moving expenses?
- How will I furnish and decorate?
- What’s the neighborhood like?
- What are the schools like?
- Is the location prone to natural disasters?
- Any problems with the house?
- How old is the roof?
- How old are the appliances?
- What’s included when I buy?
- What are similar homes selling for?
- What’s the reason for selling?
- How many days has the house been on the market?
In my future posts, I will break down each question to help you think before making that all-important offer. Let's start with the first question- your budget.
1. What’s my housing budget?
The first question you need to ask yourself is: how much house can I afford? If you don’t ask this question when buying a house, you might go with whatever number a lender approves for you. And that could run you the risk of carrying a mortgage burden so large and for so long that you feel like someone dropped the weight of the world on your shoulders- regretful. To avoid living that nightmare, don’t take on a mortgage with payments that are more than 25% of your monthly take-home pay. This includes grown-up stuff like property taxes, homeowner’s insurance, and (depending on your situation) private mortgage insurance and homeowners association dues. For an easy way to see how these costs affect your house-buying budget, use the mortgage calculator that appears on my website: JudithSutton.com under the tab: MORTGAGE CALCULATOR. or simply click the link.
2. How much should I save for a down payment?
This should be the next question to ask. If you have the money, the answer is 100%. It’s always a good move to buy in cash or put down as much money as possible to avoid a monthly mortgage that follows you around forever. Don’t worry about losing the tax write-off or whatever your financially strapped friends tell you is a “sophisticated” financial move. The math won’t work in your favor.
If you are getting a mortgage, aim for at least a 20% down payment. That way you can avoid paying for private mortgage insurance (PMI). If that’s not possible, don’t put down any lower than 10%. Otherwise, you’ll be killing yourself with extra interest and fees. So, if you’re getting a $300,000 house, you should save up at least $30,000–60,000 as a down payment.
3. How much are closing costs?
Another home-budget question you should ask is: How much should I calculate to close? For a ballpark estimate, you’ll likely pay around 2–5% of your home’s purchase price in closing costs. So if you’re buying a $300,000 home, you might have to pay $6,000–15,000 in closing costs. Make sure you save up a separate amount for closing costs before buying a house. That way, you won’t be tempted to borrow the amount from your down payment.
4. Save for moving expenses
Unless you’re “paying” your friends with pizza to help you move, don’t let moving expenses catch you by surprise. The cost to move changes drastically whether you’re moving local or long-distance—the latter being the more expensive of the two. If you’re moving for a job opportunity, you may be able to work out a relo package with your new company to cover your costs. Either way, plan for it as mentioned in STEP ONE!
5. How will I furnish and decorate?
This is definitely a question first-time homebuyers and any repeat buyers who didn’t learn their lesson the first time should ask. Don’t justify getting a loan for furniture. Having debt is one of the worst home-buying mistakes you can make. Either keep the items you already have, buy used ones, or save up for new stuff as you go along. Decorate one room at a time if it helps keep your financial goals on track. You might have some empty rooms for a little while, but your budget and your future self will thank you!
In my next blog, I will continue with good advice on thoughtful planning and goals to make your buying experience calm, sensible and without drama to your budget. Please call me with any questions or concerns! I am here to help you make good decisions!
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