So my wife and I are starting to shop for a home. We’ve never owned a home before. We almost did twice before, in two different states and in what seems like two different lifetimes ago. For a variety of reasons, it didn’t happen either time, but I’m pretty sure it will this time.
You: What makes you so sure?
As I said to a friend at a party recently: “If we don’t buy a house soon, you won’t hear about a divorce, you’ll read about a murder.”
You: Your wife really wants a house, eh?
Yes, quite perceptive of you.
You: You?
I’m ready, especially now that the bubble has become self-evident. Still, I’ve always been cautious about owning a home and remain so. Not that it’s going to stop me (remember, I like life), but an article featured in this week’s carnival of personal finance called The Other Costs of Home Ownership serves as an excellent reminder that owning a home has far greater costs than simply the monthly mortgage. Tough Money Love gives quite a list including:
- Property taxes
- Homeowner’s insurance
- Lawn care
- Internal maintenance
- Keeping up with neighbors
- and on and on.
So my question to you homeowners: What’s surprised you, financially speaking, about buying and owning a home?
To everyone, regardless of homeownership/renter status: are you interested in hearing about our progress towards home buying including the ups and downs, the negotiations, selecting and working with a realtor, the pro’s and con’s of various properties, and so forth? Which parts of the home buying process would you find to be the most interesting or educational?
Tags: home buying
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All the above affected us in some way, however, if you buy a home that is under 30% of your household income and have at least 4 figures or more in savings after you buy. It should not bring major burden.
Get a fixed rate loan and earn more than you spend
Additional debt pile on top of a mortgage, combined with no savings can break a marriage.
I am very interested in the whole process as you move through it!
It will be fun to watch you explore and negotiate. Don’t stress the cost of lawn care, or the insurance…it is all minor compared to the joy of owning your OWN home.
I would love to hear updates as you go through the process (which can be extremely fun, stressful, rewarding and mind boggling all at the same time! But well worth it, in my opinion).
I would say the biggest surprise to us was the cost of the ‘things that come up’ that you just don’t expect (from cracking basements to additional issues which come up while trying to address other issues, etc.). Sure, it’s a lot easier and a lot less stressful to call the landlord to fix the things which go wrong when renting. But, in the end, it is also a challenge to learn to do things yourself (we probably would have paid another $500 in the last year alone if it wasn’t for the internet; there are a lot of “do it yourself” websites out there). Good luck!
I had to go to Home Depot every day the week after we closed. It made me want to puke how quickly I would spend $100 on literally nothing.
Examples: rakes, (dirt and snow!) shovels, weed killer, paint, cleaning solutions, furniture, rugs, pictures, plants, window blinds… the list goes on and on.
You won’t realize how much you actually need until after you move in.
I would be interested in updates on the process of home buying. We may be doing this ourselves in a the next few years and it’s always good to see what is involved in the process.
I bought my first (and only) home five years ago. I agree with the comment about how much you will need to buy at home depot. I did buy much below my means (mortgage tazes = 20% of gross income) and have since gotten my act together. I would also suggest seriously considering a 15- or 20-year mortgage (in lieu of a 30-year). If you are planning on being in the house for a long time (more than 5 years), it may be worth taking points. And get a very good understanding of what your closing costs will be early in the process.
I also wished I had properly budgeted for home maintenance and improvements. I own a 140-year-old home and did not have my finances entirely in order when I bought. I did almost no exterior maintenance or internal improvements in the first year. This year I’m doing all the catchup work. I now save $250/month toward home repairs (plumber, roof, exterior painting, new appliances, etc).
I would also suggest that you have a good understanding of the tax and potential reassessment situation for your area (will the taxes go up after you buy? will you be able to afford them?). And get a good idea of what your utilities will be (a bigger deal if going from an apartment to a house) including water sewage.
Good luck in your process!
All: these are all great comments and excellent advice. I’ll be sure to keep you updated through future blog posts on our progress!