What to Consider Financially Before Buying Your First Home

When you're ready to buy a home, you are probably excited about finding the right location and the best home in your price range. But be sure to consider other financial aspects of your purchase before making an offer on the home of your dreams.

Additional Purchase Costs

In planning for your home purchase, be sure to factor in the realtor fees and closing costs. These will be explained when you are ready to make an offer on a property, but you will want to have extra cash available. 

Inspection fees and maintenance costs for issues like termites or leaks should also be kept in mind. Sometimes these expenses are negotiable with the seller, but it is a good idea to set aside some additional funds for unexpected surprises.

Moving Expenses

Hiring professional movers can be expensive, although it is often unavoidable and usually best for your furnishings. You don't want to take chances with a pricy piano or a newer entertainment center and speakers. 

Expert movers will make sure that everything is wrapped or packed carefully to avoid nicks or breakage. You may also want to pay extra for moving insurance as well as additional costs for any special items as determined by the moving company. 

These might include costly china or a movable hot tub. Keep some funds handy for takeout meals and packing materials on or near the day of the move.

Taxes, Insurance, and Utilities

The taxes and insurance are probably factored into your anticipated closing costs, but check to be sure. You may need to increase your current insurance coverage on the property if you are bringing more expensive furnishings or upgrading the property in certain ways. 

Such as installing new fixtures or improving the landscape. Utility deposits may be required when the heating, electric, and water bills are switched to your name.

Funding Sources

Start thinking about your financial options before you decide which home to buy. Professional lenders like Precision Capital - Your Private Money Source will discuss your home purchase expenses ahead of time to help you prepare. 

You may be able to set up a savings account or an investment plan that will ensure the needed funds are available when you buy a house. You might prefer to take a loan to cover the upfront costs of your housing purchase.

Prepare financially in advance to have money available when you find a house to buy. Getting ready now will save time and stress later.

Buying Your First Home: 5 Ways Your Finances will be Affected

Even though you’ve never owned a home before, you surely know that the endeavor will be an expensive one. It will be the largest and the most important investment you will ever make. 

Before you make the commitment, you should really sit down to determine exactly how your financial situation is going to change after you procure the mortgage. This will help you to understand what kind of home loan you should be going after and how you will be able to afford monthly payments on your home. 

It should also give you an idea of how to prepare for those unexpected expenses that comes with buying a home. This is especially true if you are buying a home for the first time.

Monthly Home Payments

People who have home loans generally find that the largest chunk of their paychecks goes to that expense. Your mortgage payments are going to be based on the total purchase price of the house minus the down payment that you made. 

Keep in mind that you will also have interest on the loan. In addition to the principal and interest, you will also likely need to pay for taxes and home insurance on a monthly basis.

Additional Purchasing Costs

Financial firms will remind you that the costs involved with buying a house are more than just the down payment and the mortgage. You will need to pay closing costs and a fee to the lawyer. 




Also, you may need to make some renovations to the house before you can move in and procure permits for some of these renovations. The house may pose safety concerns that need to be addressed before you can live there.

Regular Bills

In order to keep your home comfortable and inviting, you’ll need to pay for heating, cooling, electric and water. Some of these bills you can keep down yourself by controlling the temperature in the house and turning off the water and lights when they aren’t in use. 

You may need to do some greater shopping around though as you’re comparing the costs of larger decisions, such as the choice between gas and electric heating. When you’re assessing costs, remember to take both long-term and short-term savings into consideration.

On Your Own

If you are moving out of your parents’ house for the first time, you might not realize how many little costs you’ll have on a day-to-day basis. You won’t be able to open up their refrigerator and take food whenever you want; you’ll need to make sure that the bathroom is stocked with toilet paper and that the laundry room always has detergent. 

These bills are sometimes the most shocking to new homeowners because they forget to factor these elements in when making their budgets.

Recreational Spending

You are likely to see a dip in the amount of money that you can use for recreational spending or discretionary spending, especially if you have never lived on your own before. 

During the first few months in particular, make sure you are careful with how much money you spend. You want to make certain that you are able to put aside enough money in the event that you were to lose your job or if the house need unexpected repairs. 

Remember that houses do require work, and this work requires money.

Owning a home is a great responsibility, and doing so will affect you in many ways. Knowing how your financial situation will help you be prepared to take on your mortgage and all of the other unexpected expenses that come with homeownership.