If buying a house were only as easy at buying a pair of pants, or even a new car, our economy would be rebounding ten-fold right now. Unfortunately, buying a house can be a very complicated task if you aren’t educated on the process. Also, there can be a lot of unexpected expenses that go along with owning a home that many people fail to consider. I’ve listed some of the details of buying and owning a home that any potential buyer should be aware of.
First and foremost, in order to a buy a house you need to have the funds. A healthy down payment is well advised since it allows you the best term loans and the best rates. Did you know that you can fix the interest rate on your home loan? This is especially important because it locks in your rate and monthly payment for the entire life of your loan. Whereas a variable rate loan might allow smaller payments in the beginning, but almost always increases over time. More conservative people, like myself, will always go with a fixed rate loan.
One of the biggest drawbacks to home ownership is that many people fail to take into account the upkeep and maintenance that goes along with owning a home. A home loan is only a portion of the costs that you will incur over a lifetime. Consider all of the items in a house that succumb to wear and tear over time. Carpeting will eventually need to be repaired, as will outdated furnishings. Outside of the aesthetic items you have utilities like the boiler, water heater, furnace, and air conditioning units. These items can cost thousands of dollars, and seem to break at the most inopportune times…think about the furnace breaking in the dead of winter.
Many people who have lived with roommates or parents who pay most of the monthly bills themselves often forget about items like cable television or internet. Some areas charge extra for things like garbage and trash removal, or even recycling. Then you have your utility bills like electric and gas. One by one these monthly charges aren’t over the top, but when you add them all up they can be quite costly. At the very least you need to make sure you take an estimate of these expenses into account when figuring out your monthly loan payment and available budget.