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

  • This post was very relevant to me as we are now weighing these issues ourselves. I thank you for the valid points and informative nature of the post we are seeking SPACE more than anything – lots of kids and pets and projects – we’re THAT family, lol. Fixer upper is in our vocabulary too- cosmetically I can overlook anything- I’m really seeking the right piece of property, a foundation, a good roof and the proper zoning for our hoped for livestock:) We are VERY conservative about what we want to spend on the mortgage because we’re older, we know that is just a fraction of the actual costs in life.

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    • I hope you find the right place soon!

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  • There are so so many factors to take into consideration. Price, Location, Schools, Community, Neighbors, Land taxes…etc. Thank you for the great information.

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  • There is so much to learn. Thank you for sharing this valuable information.

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  • Lots of great info and advice in this post, thanks! I own a home right now but am wanting to move in the near future.

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  • I am lucky in that my fiance’ was buying his home when we met. Between his wage as a teacher and my small disability income, we can afford our home as well as all the monthly bills that we have. Something new homeowners might also want to look into and figure into their budget is getting a home warrantee. This covers appliances, electrical, plumbing, heating, air conditioning and so many other things at a cheaper rate than having to call a repairman to come out and complete the repair on your own. You pay a certain amount each year and then so much per call when the repairman comes and it generally will cover replacement of most parts up to and including the actual product. And, if the repair fails within 30 days there is no fee for another repair call. You may not use it for several years, but trust me… if your furnace goes, or your plumbing backs up or a pipe bursts… you will be more than happy that you paid that extra out each year.

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  • the biggest investment a body makes , great review , information for everyone

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  • So much good info here!

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  • It’s very sad for people who can’t afford a home at this time…

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  • Very good advice. Thank you.

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  • So smart of you two to work within your own reasonable budget rather than what the bank said.

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  • I’m currently looking into buying a home and this is wonderful advice, thanks!

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  • Great advice. Thanks!

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  • Great adivce, it’s a big decision and an important one.

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  • I made the decision to rent. I’d rather it be someone’s else’s problem.

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  • Thank you for the good advice.

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  • Our first home was a fixer up. Our second home was a new construction AND we was on site everyday. Good thing too, we found problems quickly and the builder had to correct them. I love the DIY series on TV.

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  • Some good advice

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  • location location location

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  • I was talking about home ownership to my husband the other night. I don’t like the house we have been in for 11 years but sometimes I wish the headaches of home ownership was gone. Looking for the right size home in the right location, and the price being a huge factor…and one that is not going to require heavy maintenance or fix its that creep in. I wonder sometimes. A home that is purchased at 150K REALLY costs over 300K when you are in it for 30 years and then factor in all the repairs…I mean in THAT many years practically everything needs to be replaced or repaired besides the frame and cement. I am not so sure anymore.

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  • Good advice.

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  • a nice and worthy blog, very interesting.

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  • This is a very good and interesting article. You share some very good points that need to be addressed by anyone looking to buy their first home. Thanks for the article!

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  • Really good advice. I’ll be sharing it with a few friends who are looking to purchase.

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  • When we were looking at buying a home, we looked at the “bones” of the house. Next important are the taxes, location then neighbours, and schools in the area.
    Thank you!

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    • that’s us too- but we’re looking for NO neighbors, lol…

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  • Thank you for the good advice.

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  • DREAMS DO COME TRUE

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  • In the past 12 years I became disabled and then my husband left me. I was left to raise my two children while living close to the poverty level. I lost my beautiful show home I had worked so hard for plus all my savings went towards making up for the horrible amount of money disability pays me monthly. While I appreciate your article and how helpful it may be, I will never own a home of my own again.

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    • I’m so sorry Jo Ann. :(

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  • Went out today to look at a house and as we went through it the realtor was doing her sales thing about this and that as I quietly said nothing. When we were done she asked me if I wanted to make an offer and I said “you’re kidding right?” Apparently she mistook my silence for taking it all in when in actuallity my silence was from shear and utter disbelief in what she was showing me given what they were asking which was WAY TO FREAKING MUCH for a dump!

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  • Location is critical in purchasing a home. You want to select an area that has good resale value, just in case.

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  • My daughter is in the process of looking for a new home. Thanks!!!

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  • This is great advice. I am going to pass along to my grown daughters and nieces about your site.

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  • Good advice about figuring out what you could afford vs what you should actually pay. Too bad more people don’t follow this advice.

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  • we could have used this advice years ago! thanks for sharing!

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  • if we were in a position to buy a home i’d look for something that needed cosmetic work…more house for your money..and cosmetics can always be changed!

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  • had that happen to me the bank told me what i could afford after i had showed my monthly income and budget they showed me what i could afford and me being gullible bought into it. 7 years later my house was up for short sale. I wish I had read your post back then. From experience on learns though and im glad you are sharing yours so that others may learn from it and not make the mistake i did in trusting the banks.

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    • it scares me what the banks say- and then we’re all in a mess!

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  • i would rather keep renting my home thank you for this great topic

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  • That’s amazing all the work you did yourselves. Great way to save money and make the house even more special.

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  • I really hope we can purchase a house soon.

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  • I really wish we could afford to buy a home in the city we live. Unfortunately a shoebox sized condo starts off at around 350k and with us having 2 children, that’s not really an option.

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  • everyone needs to know this! we have all heard horror stories about this topic.

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  • Location and price is what i look for

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  • I look for location when looking to purchase, if I am happy in my location, I can always fix up the house over the years

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  • I can’t afford to buy a home in this economy.

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  • We are just starting to look for a house and already I am hating it. In NJ PMI is required so I suppose we will be paying it because we don’t have 20% to put down. Oh well. You do what you have to do.

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  • Interesting. I wasn’t familiar with private mortage insurance before.

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  • I wish I had this information when I pick out my home 15 years ago.

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  • Many years ago I looked to own my own home, of course it is expensive..Now I am glad I rent rather than own..The American dream of work hard to finally have your own home no longer exists…Its a shame that dream is all but gone for the many who come to America to make a difference…

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  • My son pointed out to me yesterday that he is among the first generation in over 60 years to have to seriously worry about his ability to buy a home when he is grown. What a sad state of economics we are in when an 8th grader has to worry about this! I truly hope our youth can overcome this depressive era to enjoy home ownership.

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