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What to Think About Before Buying Your First Home

Many aspiring buyers only look at the cost of properties and mortgages. There's a lot more to consider

Homeownership seems like a fading dream of a distant, easier time to today's youth. The average cost of a single-family home has nearly tripled in the last 30 years, and young adults are now forced to either live with roommates or stay at with their parents until they earn enough to properly fly the nest. It's a lofty ambition to own a property before 30 in this day and age; it will be even harder if you live in a more expensive area like a major city. However, all that aside, it doesn't hurt to start researching your options and making a plan.

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The Actual Cost of Buying a House

Mortgage costs are only one small piece of purchasing property. You'll need a down payment as well, which impacts your monthly mortgage rate, and closing costs, lender and realtor fees and more. The total cost of buying averages between $6,000 to $15,000. You'll also have to pay homeowners insurance and property taxes each year, which can cost a hefty chunk of your income. Make sure that you research every possible expense your new home will bring. Many aspiring buyers only look at the cost of properties and mortgages. There's a lot more to consider, even down to moving expenses, new furniture and cable installation. Knowing how much you'll need to move into your new place will help you build a more realistic picture of how much you need to buy and how much money you'll need to continue living in it.

Start Budgeting Like You Already Have a Mortgage

If you know how much you could afford to pay for a house each month, it's time to start acting like you already have one. This means taking your living expenses more seriously and addressing anything that negatively impacts your budget. Do you have a lot of credit card debt you need to pay off? Are there unpaid taxes or other bills in limbo that you need to repay? Look at your average cost of living, too, which is bound to increase when you add a house into the mix. If you deduct the estimated cost of your mortgage from your current monthly income, how much money do you really have left?

Many aspiring buyers only look at the cost of properties and mortgages. There's a lot more to consider.

Find ways to improve this figure by shopping more mindfully, spending less on entertainment and even refinancing your car. Car loan refinancing takes less than 20 seconds and even give you cash back in 24 hours. The process doesn't pull your credit, and it won't affect your existing loan if you decide to stay with your current lender. Explore your options now, so you can be confident in your financial security when you do eventually buy a house.

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Think About Where You Want to Wind Up

People change more in their teens and 20s than they probably do during any other period of adulthood. This means that what you want now may not be what you care for in 10 years. Owning a home is a major investment, and you shouldn't tie yourself to a property or location you can't reasonably see yourself settling down in for at least five years. What are your plans with work? Are you open to relocation? Are you interested in moving out of state or traveling? If you have children, is this the place you want them to spend a decent part of their childhood? Once you buy, it can be a serious challenge to relocate, especially if the market in your area doesn't move fast or the economy worsens by the time you want to sell. Take all of these factors into account rather than focusing solely on the achievement of owning a home.

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