Decisions to make when purchasing a home.

16 Flares 16 Flares ×



One of our first decisions we made when purchasing our first home was to seek out a “handyman special” because we knew it would allow us to have more home for our money, and live in the area we wanted to live in.  The home we moved into was in a fantastic location and worked in so many ways for us.  It was a wonderful starter home- once we had some issues fixed. From issues in the basement right on up to re-pointing the chimney, we did it all- ourselves- right out of our own pockets.  The critical things we took care of right away, the more cosmetic issues we waited until we had funds for.  I suppose that’s really the second decision- the first was what area we wanted to look in!

mortgage trends

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.

 

Google+ Comments

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

  • These tips are very helpful and useful. Thanks for sharing!

    Reply
  • My parents just had their hot water heater break and pipes burst also flooding their basement-HUGE cost and mess. I’m glad I’m a renter right now-great post thank you.

    Reply
  • Great tips! Thank you for the info!

    Reply
  • I ran into the banks trying to say we could afford more than we actually could. I wonder if people go for it and then end up having to foreclose or go without important things to be able to pay for their loans. Very good advise, especially for young people getting into their first big buys.

    Reply
  • We bought a handy-man special too & was so happy that we found a good house, good neighborhood & we did it up the way we wanted. As far as mortgage we keep all our eggs in one basket. Everything at the same bank.

    Reply
  • So much information to take in . Lots of things to do and consider when purchasing a home. Thanks for all the tips you gave us. Sometimes if you have the money and can do alot of repairs yourself to a home you can get it cheaper. That way you can do alot the way you want it to look.

    Reply
  • We had to take out mortgage insurance too… it was the same scenario, where 20% down or pay PMI. It hurt a little, but got us into our first home, which we are still in! lol We said 2 years, but it’s been almost 12. Go figure! We are saving pretty heavy and hope to not need mortgage insurance when we upgrade. Guess we’ll see! Nice blog. :D
    welindsey at gmail dot com
    wendy2lindsey at yahoo dot com

    Reply
  • we just refinanced our home and lowered our mortgage but what great tips for new home buyers

    Reply
  • Great tips THANK YOU VERY MUCH !

    Reply
  • GOOD TIPS FOR BUYING HOMES-THANKS

    Reply
  • A really good read. We are looking to purchase a home so thank you!

    Reply
  • A very valuable tip. Everyone needs to consider this. Thanks for the share. :)

    Reply
  • House searching has been suspended until summer.

    Reply
  • I have never heard of mortage insurance. Thanks for the tip.

    Reply
  • thanks for the really great post

    Reply
  • A house with alot of DIY ways to spruce it up is definitely a good thing :)

    Reply
  • This is our biggest concern! We still live in an apartment because we fear that the costs of a house will be far greater in that you usually need to pay for a handy man versus a complex where you can just call maintenance for free.

    Reply
  • Trying to find a house that has a nice kitchen and bathroom and uses gas as a heating source is so hard in my area and IN my budget. blah.

    Reply
  • Very good advice escpecially for first time home buyers.

    Reply
  • For a first-time home buyer, it usually is best to economize where you can and by purchasing a home that you can make the necessary repairs yourself you can save a lot of money.

    Reply
  • Thank you for the tips

    Reply
  • great help thanks

    Reply
  • great article thanks

    Reply
  • We do so want to buy a home with some land, but the paperwork is intimidating! Thanks for letting us know about this and Congrats on your new home!

    Reply
  • Good tips. Thank you!

    Reply

Leave a Comment