Items to Consider Before Buying a Home
The dream of homeownership is still at the top of the list for many of you reading... Today's lower housing prices and low mortgage interest rates have certainly made this dream a reality for many. If you have been considering purchasing a home either now or in the near furture it should be a great investment for you over time. Part of this process for a home purchase is making a budget. Along with your house payment, here are just a few additional things that you might want to consider when making that budget.
1. Property Taxes: In Idaho, property taxes vary considerably. Depending upon whether you purchase in Idaho Falls or Rexburg or different parts of either town, your property taxes may vary a great deal. If you are purchasing a rural property they will be much less than a property in town. You will want to get an idea of what your property tax amount might be and add this to your monthly payment expense.
2. PMI or mortgage insurance. If your down payment is less than 20%, you will be paying for mortgage insurance. You can get an idea of this cost by consulting your mortgage professional. You will also want to add this to your monthly housing costs.
3. HOA Fees. Many neighborhoods have associations and many have monthly or yearly fees involved. You will want to determine if the home you are thinking of purchasing is in an HOA and then determine what fees if any are involved. This also may add to your monthly housing expense.
4. Homeowners Insurance. You will also need to have a homeowners insurance policy on your home. The rates for homeowners policies will vary because of location, home value and of course add ons such as earthquake or flood insurance. You will want to get an good idea from your insurance agent on these costs and add this to your monthly housing expense also.
5. Utilities. Utilities, which include water, sewer, electric, gas, etc. can also vary significantly from area to area depending upon the utility company that services each specific neighborhood. The costs can also vary a great deal from home to home depending upon age of the home, heating source and of course size of the home. You can get estimates on costs from your local utility companies or a Real Estate agent can access past utility usage for a specific home as well.
6. Appraisal and other closing costs. Your home mortgage professional can give you a good idea on what these costs might be. These costs are up front costs that you will be required to pay upon closing your home purchase transaction. Also, ask your mortgage professional or your Real Estate agent about how you might get your seller to cover some of these costs. It is important to know these fees so that there are no surprises at the closing table.
If you are interested in purchasing a home and would like professional help with determining these costs and also looking at just how much home you can purchase in this market, please call us. We help many buyers each year set a budget as part of the home purchase process.