Buyers looking for their first home are often flooded with questions. Closing costs, interest rates, down payments, and amortization periods all add up to a complicated process that many people find themselves asking “What do I really need to know about buying a house?”
The truth is much of the information out there can be confusing and overwhelming. Below we’ve outlined some of the most important things buyers should consider before taking the plunge into homeownership:
- Location, location, location: Not only will your neighborhood affect how much you pay in property taxes or utilities but it also has an effect on how much you’ll pay in transportation costs due to traffic congestion/infrastructure maintenance. Taxes and transport costs make a big difference in affordability – consider what you can afford on your budget and don’t let friends who live in more expensive areas set the benchmark for what you should expect.
- Check out your commute: Municipal transit, traffic patterns and safety records all contribute to a community’s overall desirability and cost of ownership. If you’re planning on working downtown or commuting via car, be sure to factor those costs into your monthly budget. Don’t make the mistake of assuming that large homes mean large backyards with plenty of room for exercise – most people living in high-density areas gravitate towards small-medium-sized lots which tend to have fewer maintenance issues over time (not to mention lower taxes!).
- Is it move-in ready? Many first-time buyers are counting on making updates to their homes before moving in but renovations can be stressful and time-consuming. Looking for a move-in-ready house may save you money in the long run.
- What about amenities? As part of municipal infrastructure, amenities are more expensive for taxpayers so you should take everything into account before signing on the dotted line. Cable, internet, and water/sewage rates are some examples of costs that can raise your monthly expenditures (especially if you plan on spending a lot of time at home!). Some areas also offer community pools/parks/gyms which can be great for families or people who love being active. Not all amenities are free – you should always ask about monthly fees before signing the lease.
- How much home can you afford? Buying a home is one of the biggest financial decisions of your life so it’s important to have realistic expectations regarding how much house you can afford. Don’t forget to factor in things like closing costs, moving expenses, and maintenance/repairs into your pre-approval amount. Those little surprises can add up quickly!
- What about taxes? Many buyers take their current tax situation (or lack thereof) as a sign that they will be able to purchase an expensive property without issues but this isn’t always the case. If you’re buying with someone else (like a spouse or partner) who is in the same income bracket things may be different but if you’re looking to buy on your own, it’s important to factor in additional taxes into your home buying budget.
