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 actually dont own my own home at the moment but loved the advise and will take it into account when I buy. Thank you!

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  • If you are looking at how much you can afford, if it is a fixer upper, be sure to make a realistic estimate of the repairs that HAVE to be done and factor that in like it is part of the mortgage payment.

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  • than you so much

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  • I totally agree about NOT buying a home priced at what the bank tells you that you can afford. Our home is half the price of what we were told we could afford. We wanted to live comfortably and not stress about a big fat mortgage.

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  • Great info for buying a home!!

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  • This was very helpful thank you so much!

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  • great advice!

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  • Such a great post! For me it would be location and budget at the top of my list!

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  • Budget, location, and community amenities are important to us.

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  • I love your thoughts about a fixer upper :)

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  • I know some people who can definitely use this information :) totally passing it along!

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  • We got married about 8 months ago and are starting to look for a home. Thanks for such a great post!

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  • Budget is obviously the most important thing to think about

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  • Most important to me is LOCATION, LOCATION, LOCATION. It should be near supermarkets,hospital, church and if possible,school and workplace. Then the PRICE of course and the amenities/ function-ability of the house itself.

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  • I look for a great neighborhood! Makes a big difference with kids!

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  • very helpful.

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  • It was very smart of you to go lower than what the mortgage company says. A lot of people don’t take into account the utilities and possible maintenance and repairs costs, or the property taxes.

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  • The very first and maybe the most important step is setting a budget and sticking with it. Dont go overboard with options

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  • Location was and is always our biggest factor, having 6 kids and always looking for the best school area and then STAYING in that area. We are down to 3 of 6 kids, with our youngest having just 5 1/2 more years until out of high school. We do really like our neighborhood, but with kids out on their own someday, we will be looking out of this comfort zone probably. Then, the next is looking for a house that “fits” us for years to come and has the amenities that offer a couple growing older soon enough, like one level home with basement, laundry on first floor, guest room and enough room for kids/grandkids to come home to and hang out. Of course PRICE is the first consideration. Cant buy what you can’t afford. Especially these days with uncertain jobs and in the next 15-20 years, not enough for retired people to live on.

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  • definitely looked to see what schools were nearby!

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  • We are buying a home right now a HUGE factor I found when buying a home is that to make sure it is well insulated if you live in a cold climate 6 months out of the year as I do… The home we are purchasing now cost us a fortune to heat We are paying almost a second house payment just to heat it… SO I will be looking more into my next home purchase a little better…

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  • We just bought a house a few months ago! One of our big things was windows. The house either had to have new (ish) windows or that would be our first project. The seller wanted us to be happy with purchasing so he had new windows installed before selling it to us. He also paid for a brand new roof!

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    • Nice for you! We had to replace a few windows- custom size of course :(

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  • Most lenders will require that a buyer purchase the mortgage insurance, but it is a good idea to get it anyway.

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  • Great advice!

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  • Don’t forget to have everything inspected by someone you hire yourself.

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  • Great post! Buying a new home is always stressful at least for me it was.

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  • nice post

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  • Great post, I’ve never heard of mortgage insurance before me and hubby will be house hunting starting next year so definitely some things to consider

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  • There are so many things to consider when purchasing a home. Thank you for putting this into a blog for new buyers to follow.

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  • Are we supposed to keep leaving a different comment on this blog post for our extra entries for the Acer Notebook. I thank you for all of these home tips for buying a new home. It is so important to make sure that you all the costs up front!

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  • Congrats!!!

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  • Thanks for the great tips! We got lucky and had a house given to us by family :) I was definitely a fixer-upper though, abandoned for two years..

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  • can i afford the payment, insurance, taxes, utilities and up keep on one salary. do not depend on both spouces always having an income. put the other persons income away for that 20% down payment on the next place. never take out a loan that is due in 2 years or 5 years nor an interest only loan.

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  • Again, I will remember this when looking for my own home someday.

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  • There certainly are a lot of decisions to make, but you can only start with a handyman special if you can do the work yourself.

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  • I want to buy my own home in the next couple years and your advice is priceless- Thank you- I can’t know/learn enough

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  • Yes, a lot of decisions should be taken when purchasing a home.

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  • That is some excellent info up there. We own our home too. There would be a lot more home owners if everyone did their own budget!

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  • Great information here! Budget is one of the most important aspects for us.

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  • Congrats

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  • We looked for a foreclosed home that was pretty much move in ready

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  • I think the two most important decisions in purchasing a new home is 1) choosing a good location and 2) deciding how much money you want to spend on a monthly mortgage. Great article!

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    • Thank you!

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  • cerco il parcheggio,una buona visuale e stanze luminose

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  • thanks for the tips

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  • Thank you for the chance to win

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  • We really screwed up buying our first house. The real estate agent was my best friend’s mom so I really thought she would look out for me (this being my first time buying). I was so wrong. We are in way over our heads and have no idea what to do. Wish I could do it over again!

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    • Oh I’m so sorry to hear this Jennifer. Can you contact a financial person and see about refinancing or something?

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  • This was very interesting and informative. I will be sharing this thank you

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  • Great advice, we own our home, 2nd one and we picked a great spot with 19 acres

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  • congrats on your new home

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  • We rent a house right now. Previously owned one. Before that rented an apartment. The one big factor in all residences has been energy efficiency and leakage (ie: cold drafts, too hot in summer). So, weatherization would be my number one priority, then energy efficiency over all.

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