Decisions to make when purchasing a home.

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After the decision to search for homes that needed work, we had to go ahead and decide how much money we were willing to spend for a mortgage payment each month.  This is something that’s very personal- and I would not ever tell you what to do, but I will say to look very carefully at your financial situation when you are given that amount of house you can “afford.”  For us, we were told that we could afford a house more than triple what we felt we could afford- and that was with both of us working full time….and no children.  We sat down and factored in what our utilities might be on a house that size, and also what the property taxes would be (in Connecticut, they are high!) Once we knew what we could afford, we started looking around in our target areas- and quickly realized that to be able to afford the home and be able to have the cash to fix things, we were going to have to rethink how much we’d be placing as a down payment.  For us, what the bank said we could afford and what the reality of our budget was were very, very far apart.  Sure, we could have afforded that number the bank gave us- but we’d not have any money to pay for food, nor utilities, nor gas for our vehicles, let alone property taxes.  We opted to go with a number that WE felt we could live within based on what our budget and expenses were each month.


When you buy your first home, regardless of size, location, or price, many people decide or have to purchase mortgage insurance.  There are reasons for purchasing this insurance, and it is meant to offer a financial guarantee the lender should the buyer default on the loan- it will help to decrease or eliminate the loss for the lender altogether. It kind of makes things more “even” on the risk scale for the borrower and the lender. For many first time home buyers, private mortgage insurance is almost always required if you are putting down less than 20% of the mortgage.  For us, mortgage insurance was a way to ensure that we COULD get into our first home, and also have the funds available to do necessary renovations- we were buying a fixer-upper that ultimately we had to “gut” and had we put that entire 20% or more down and not done the mortgage insurance, we’d have had to end up taking out a second mortgage or a homeowner’s loan, neither of which we wanted to do. There are many resources available to help you find out about mortgage insurance options- Genworth financial has a very comprehensive section about purchasing mortgage insurance. This article about planning your first move may be helpful to you as you start this journey.

What are some of the things that you look for when purchasing a home?  Be sure to also read the post about what made us decide to purchase life insurance policies

 

 

This is a supported post with information provided by Genworth Financial. All thoughts and opinions are my own.

 

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About the author: I’m a 30-something mom to three, brand ambassador. content creator, social media maven, blogger extraordinaire, earth lover, butcher, baker, candlestick maker (or something along those lines) – love word games, crafting, cake decorating or shooting pictures.

442 comments… add one

  • I’ve lived in my townhouse for 30 years. Last year it was paid off. Love having a garage. Used the fireplace only in the first year. Knowing what things you want in a house will help you decide.

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  • Nice, thanks for sharing.

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  • we are looking for a home right now and it is def. frustrating…

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  • Great advice. I’m just so glad we own our home and it’s bought and paid for!! To be honest I would hate to think about buying a new home right now, ya know??

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  • Advice noted. Thanks.

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  • Great idea to buy a fixer upper and something you can afford.

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  • Buying a home is a very stressful event.

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  • Great advice – hopefully I’ll get to the point where I’ll be able to buy a home!

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  • Sometimes you are given to much advice and it makes it hard to make a decision

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  • I wish I would’ve known this stuff when I was buying my houses! These are great tips. I think, bottom line is don’t overspend and get in over your head! :)

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  • I’m a firm believer in fixing as much as I can of anything on my own, if I can do it!

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  • I am in my 3rd home and have experienced buying AND selling. I think you were very wise to come to a figure that you were COMFORTABLE paying, rather than what the bank qualified you for. Afterall, who better than yourselves to know what your other expences and living costs are….

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  • Fixer-uppers are great, as long as you have the time and energy to devote to them. They’re definitely a great way to save some money, though, so they shouldn’t be discounted as a potential buy.

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  • Always need extra money for the unexpected. Bought my home in 2007 and we are always doing something to it!

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  • Great advice but still really confusing

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  • Something to think about for sure! Thanks!

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  • You give great advice and it rings of truth.Thanks

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  • Mortgage insurance is particularly important. Now if I could just afford a mortgage…

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  • Too many under estimate what the cost of the essentials cost…………if they would just get the basics and then every year upgrade or add their addons.

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  • Great advice! We look for a safe and comfortable place when purchasing a home. A home that does not need a lot of work, although I love to revamp! And lots of room for our boys to get outside and play.

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  • Great advice!

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  • Great tips. I look for a location that is good for my lifestyle and consider my budget which means a smaller place for a better location.

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  • I wish that I was in a position to buy a home. Renting is such a waste!!

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  • thanks for the article we had purchase our home 12 years ago and we are still here and hopefully we will be able to give this home to our kids.

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  • I also agree that it’s important not to extend yourself too far in buying a home. It should be a comfortable amount with room for things that happen in life. Too many people end up losing their homes because they go in over their heads. Besides finances, another important thing for us to consider when buying our house was the schools our children would attend.

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  • We found our home on accident, and it was within our budget. It was less than 10 years old also! You never know what you will find when you drive around alone, with no pressure from a realtor!

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  • Your post was helpful. I don’t own a home, but hope to one day :)

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  • I’ll be looking for a fixer upper once I can look at buying a house also!

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  • Thanks for the information. When is is my turn to buy a house I would definitely prefer to buy a fixer upper!

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  • I wish I’d read this before we bought our first house!

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  • Great tips! We purchased our home privately, from a family member, so I didn’t know most of that even though I AM a homeowner lol!

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  • Thanks, We are looking to buy our first home soon.

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  • good information. You have to have a budget and stick with it or you get buried.

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  • Thank you so much for this article. We are looking for a home and I am so glad I stumbled into valuable information!

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  • some good ideas here… saving for a home can be so hard, and making a purchase is a big decision

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  • awsome post, thanks for the pointers, we all need a littl ehelp at times

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  • These are great tips and it is so important toleave some extra money for fising things.

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  • When I was looking to purchase my first home the lender told me no problem with financing the home but I wanted to have extra money put aside for food, repairs, car problems should an unexpected crisis occur. I decided what I was comfortable paying out each month and decided not to put myself in a financial bind and decided not to purchase such an expensive house.

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  • I also agree that it’s important not to extend yourself too far in buying a home. It should be a comfortable amount with room for things that happen in life. Too many people end up losing their homes because they go in over their heads. Besides finances, another important thing for us to consider when buying our house was the schools our children would attend.

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  • These are some great tips, I have a friend who bought a gorgeous home. But, although the bank said they could afford it the payment is like $1200+ a month….that’s a lot of money to have to come up with every month. Sometimes it’s still not worth the stress, even if it is gorgeous.

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  • We chose to base our payments on one income, not two, despite being DINKs at the time. We went through unemployments, a kid, and one stay-at-home mom later and we’re still in our house. Good thing we didn’t take the real estate agent’s advice and buy a house twice as expensive!

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  • What a great post! We want to be buying home number two in the next year. I pinned this for future reference. Thanks, ma’am.

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  • Budgeting your money month by month is very important.

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  • Great posting! We’ve done 95% of the repairs on our “fixer upper” ourselves by being creative, because we didn’t want to put out the money that we’d estimated all repairs would cost…this is great if you want to spread the repairs out over 10 years…lol..personally, next time I’d like more than one working bathroom in a home for 7 people, but I’m crazy like that ;) (a man who guts 2 out of 3 bathrooms 2 weeks before the family reunion at OUR house, has a death wish, just saying!) The PMI is def the way to go for some people!

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  • Thanks for the advice. I’m going to need to buy a house within several years.

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  • There are so many things I wished I would’ve considered before purchasing our first home. I guess I was so excited and impulsive that I didn’t think about some important things. Great post, perhaps a future purchase will be a wiser purchase, but I doubt I could ever get my husband to consider such a thing. Good luck to all first time home buyers out there.

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  • Buying a home was one of the most stressful things I have ever done!!

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  • Great things to consider when thinking about buying a home. Hopefully we will get there someday.

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  • Ugh sorry I hate PMI… but you’re right it’s kinda only fair to the lender to get some security! :)
    I think you spelled out very nicely how to have a balanced approach towards purchasing a home WITHIN YOUR MEANS! :) Too many ppl don’t do that and they get in over their heads! :)

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    • WAY too many get in over their heads.

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  • This is great. I think you really need to have a budget when buying a house and stick with it.

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