I thought it was about time I added some more tips and tricks to my blog, so today’s topic is for the Buyers out There.
Buyer Tips – Expectations and Your Budget
When you start your journey of buying a house it can be both exciting and nerve wracking. Buying a house is a big commitment and some thought should definitely go into the process before starting the journey. There are many things to think about but for the love of simplicity we will just talk about expectations and your budget today.
Buyer Tips – Budget
Your budget is going to be one of the biggest pieces of buying a home. The first step is to think about how much you can actually afford each month when you are buying a home. There are things to consider in this monthly payment aside from just the house payment.
- Insurance – You definitely want to have your home insured and if you are getting a mortgage to purchase your home you HAVE to have insurance.
- Taxes – Property Taxes are usually payed once or twice a year, depending on the area. Once again most mortgage companies will require you to make a monthly payment towards these and they will hold the funds and then pay your taxes for you.
- HOA Fees – Colorado is pretty rampant with HOA (home owners association) or covenant controlled communities. These fees can vary depending on the neighborhood you choose to buy in. There are some neighborhoods without HOA’s many of these are older neighborhoods, so if you are looking to buy a new or newer home you are likely going to have to consider HOA Fees. These can be paid monthly, quarterly or annually.
- Mortgage Insurance – Mortgage Insurance can be tacked on to your monthly loan payment if you don’t have a certain amount down. Usually this is 20% or less. This amount will vary dependent on your down payment and which type of loan you use for your mortgage.
- Upkeep – Even if you buy a new home you are still going to need to factor in upkeep. From doing updates in your home to keeping your home well maintained you will need to factor in the cost of upkeep to your home, it can be a good idea to put a certain amount a way each month separately so that when things do come up you aren’t in a bind.
The best person to help you with how much these things might cost is a mortgage adviser or lender!
So the question is how much can you actually afford on a monthly payment total? How much can you spend without going into debt, without putting you over the edge and without making you feel like you can’t do anything else. House poor is a thing and not everyone loves it ( I certainly don’t).
Once you have worked this out it is time to get pre-approved to see how much you can actually afford. In my mind there is a difference between how much you can actually afford and how much you want to afford!
Buyer Tips – Expectations
Once you have worked out how much you want to spend and what this equates to in house price terms it is time to talk to a realtor (if you haven’t already spoken to me).
A realtor can help you set reasonable expectations and if they are a good realtor it is important to listen because we know what we are talking about!!
We can show you homes in your price range so that you can get an idea of what you can actually afford and start to adjust your expectations accordingly. It is important to weigh that monthly payment need with what you feel you need in a home. It’s all about BALANCE.
You might NEED 3 bedrooms, 2 bathrooms and a yard and you might WANT completely updated. Well look for that need first and understand depending on your budget that you may need to do some updates yourself.
You might NEED to be in a good school district and you might WANT to be in a neighborhood with a pool. Once again weigh it all up.
Having reasonable expectations will help make the home buying process easier and a more enjoyable experience.
Remember your realtor will try their best to help you but You Can’t Always Get What You Want.
Also remember that if this is your first home this is likely just your starter home, it is a place that gets you into owning and allows you to start building equity so that you can move on to bigger and better things in the future!!
Looking for a Denver realtor or a Longmont realtor, well hey, fill out the contact form and lets chat!