So You Want to Buy a House, Now What?

Buying a home is a huge financial commitment but can be incredibly worthwhile if you're prepared. Consider this advice before you fall in love with that house you saw on Zillow. 

1. Are you financially ready?

Home ownership readiness is about more than money, but financially readiness is critical. 

Don’t be seduced by those handy “mortgage calculators” on the real estate sites. They don’t illustrate the cost of taxes, mortgage insurance, home owners insurance, utilities covered by your landlord and maintenance on your house. All of this can add up to hundreds of dollars, so while the mortgage calculator might match or appear less than your rent – the true cost of owning a home is far greater than the mortgage amount.

2. Are you ready?

Home ownership means you are responsible for a whole slew of things your landlord currently takes care of. Don’t be tempted by the fun parts of owning your space – like painting – there are some really not fun things in your future … Skunks might burrow under your house, pipes might burst, toilets might malfunction, furnaces won’t start, citations from the city for uneven sidewalks or over grown landscaping. 

As a renter your landlord should handle all of these things for you. As a homeowner you’re on your own to resolve these issues. 

3. Have you found a relator?

The internet abounds with articles on how to buy a house. You can read whole books about it. At the end of the day, a good realtor will make everything clear to you. A good realtor will walk you through the process step-by-step and give you great advice along the way. 

Find a realtor willing to spend the time to help you and you can skip all that reading. Also, remember – realtors earn their commission from the seller – not from the buyer. As a home buyer you don’t pay your realtor.

4. How much do you want to borrow?

There are multiple ways to secure a home loan, including shopping around or using a mortgage broker. Ask your realtor and homeowners you know how they handled securing a mortgage and then decide the right path for you. Your loan approval will allow you to borrow up to a specified amount, but you need to determine how much you want to borrow and shop in that range. Borrowing at your limit might mean you get a nicer house, but your monthly payments won’t leave you room to manage unexpected financial obligations … like skunks. 

5. Don’t try to time the market.

It’s impossible to anticipate the housing market. The best time to buy is when you find the perfect house and can afford it.

6. Don’t rush.

Take your time settling on the right house. Try not to let factors like interest rates, your lease expiration date and other measures impact your decision to buy. Taking on a mortgage is a huge commitment. It’s worth it to wait for the right house.

Additional Resources

Tiny by Design | Pacific Magazine, Spring 2016