Why First Time Buyers must consider the Total Costs of Home Ownership: Tips for First Time Buyers
Many people dream of owning their own home with a white picket fence. Whatever type of home you are considering purchasing as a first time buyer it is important that along with the mortgage payments you must consider the actual costs of home ownership. These can be far higher than many people anticipate, and stretching your budget to buy the highest priced property you can afford is a mistake which has cost many to lose their homes through foreclosure.
Tips for First Time Buyers: Tips On First Time Buying a House
A very handy tool to use before applying for mortgages is an online mortgage calculator. It can be used to highlight expenses you may not have thought of or allowed for in your budget. This should in no way replace drawing up an actual budget, and understanding the wisdom of having an emergency fund in case of unemployment, illness or a reduction in income.
The Benefits of A Good Sized Down Payment
The benefits of a good sized down payment cannot be overestimated, as it equates to immediate equity in the property, and thus cushions you against fluctuating property prices. Unless you can provide a down payment of 20% the mortgage lender will charge you for mortgage protection insurance which only benefits the lender and not the buyer. The higher the down payment in total the better interest rates will be available to you, and coupled with an excellent credit score will save you tens of thousands of dollars in interest payments.
Tips on Getting a Mortgage
Those used to renting will not be used to the additional costs which come with home ownership. Sound advice is to calculate and budget for 1% of the property value per annum to cover the costs of repairs and home maintenance. You should consider the costs of plumbing problems, general wear and tear and the breakdown of necessary appliances. With older properties it is wise to allow for even more towards property maintenance, and thus budget accordingly so you don’t need to run into debt if any problems arise with the property or appliances.
Property Insurance
As a home owner you will need to pay property insurance. Again the premiums will be lower if your credit score is excellent. You will be responsible for paying annual property taxes and the full range of utility charges which you should calculate as being higher if the home you purchase is larger than a rental property you were previously living in.
No one wants the constant worry of paying an overly expensive mortgage which was obtained by borrowing to the limit, and failing to factor in the other expenses of running a home. Draw up budgets in advance and only take a mortgage for a realistic amount. This will allow you to more than simply work to cope with the expenses of running your home.
Tips for First Time Buyers: Tips On First Time Buying a House
A very handy tool to use before applying for mortgages is an online mortgage calculator. It can be used to highlight expenses you may not have thought of or allowed for in your budget. This should in no way replace drawing up an actual budget, and understanding the wisdom of having an emergency fund in case of unemployment, illness or a reduction in income.
The Benefits of A Good Sized Down Payment
The benefits of a good sized down payment cannot be overestimated, as it equates to immediate equity in the property, and thus cushions you against fluctuating property prices. Unless you can provide a down payment of 20% the mortgage lender will charge you for mortgage protection insurance which only benefits the lender and not the buyer. The higher the down payment in total the better interest rates will be available to you, and coupled with an excellent credit score will save you tens of thousands of dollars in interest payments.
Tips on Getting a Mortgage
Those used to renting will not be used to the additional costs which come with home ownership. Sound advice is to calculate and budget for 1% of the property value per annum to cover the costs of repairs and home maintenance. You should consider the costs of plumbing problems, general wear and tear and the breakdown of necessary appliances. With older properties it is wise to allow for even more towards property maintenance, and thus budget accordingly so you don’t need to run into debt if any problems arise with the property or appliances.
Property Insurance
As a home owner you will need to pay property insurance. Again the premiums will be lower if your credit score is excellent. You will be responsible for paying annual property taxes and the full range of utility charges which you should calculate as being higher if the home you purchase is larger than a rental property you were previously living in.
No one wants the constant worry of paying an overly expensive mortgage which was obtained by borrowing to the limit, and failing to factor in the other expenses of running a home. Draw up budgets in advance and only take a mortgage for a realistic amount. This will allow you to more than simply work to cope with the expenses of running your home.
