Considerations for Buying a Home
Everyone needs some place to live and many Americans have home ownership in their plans. Buying a house is a large expense and the process can be complex. If you are thinking about buying home, consider your needs in these important areas:
Physical space – number of bedrooms, bathrooms, gathering places, and outdoor spaces
Location – distances to work, school, family, friends, medical care and amenities such as shopping, dining, and recreation
Affordability – the cost of the monthly mortgage, utilities to heat and cool the home, and maintenance costs (lawn care, plumbing, painting and general repairs) can add up. Whether the home is affordable or not is tied to the price you pay for the home itself and the price you pay for borrowing money to pay for the home (the mortgage).
Mortgage – the cost of the loan is just as important as the price of the home, if not more important. Shopping for the mortgage and lender is key to keep from spending more than necessary to purchase your home. Lenders typically offer mortgages at a range of interest rates and each lender may have different mortgage products at varied prices and fees. MoneyMatters’ mortgage page will highlight just how important it is to shop for your mortgage.
Insurance – homeowner’s insurance is required to protect the lender’s interest in the property. The cost can vary by insurance company for the same level of insurance protection. And, depending on other assets you may have (jewelry, collectibles, antiques, etc.) you may want to add special clauses called “riders” to your policy to provide protection for valuables.
Fortunately, the Consumer Financial Protection Bureau’s, a government agency, “Owning a Home” site offers a set of resources that home buyers can use to make informed and educated decisions as they navigate the home buying process.
Ready to Buy/First-Time Buyer
- Here is information for the First-time Buyer and others who are ready to buy.
- Need to know about mortgages? The “Steps to Buying a Home” publication will get you started.
- This information will help you make sure you have enough and appropriate homeowner’s insurance coverage.
— Written by Dr. Carolyn Bird, AFC