Preparing for a Home Purchase Begins with Understanding Your True
Financial Commitment


By Keith Loria

Buying a home is an expensive proposition,
therefore, it’s crucial that you prepare yourself ahead of time for the amount
of money that’s required as you make your way through the process.

Making a list of what your monthly expenses will be is a good first step
toward fully understanding your true financial commitment before signing the
dotted line.

Here are some of the expenses you can

1. Property Taxes.
Taxes can add hundreds of
dollars to your monthly mortgage payment and can increase depending on school
and town budgets. Remember that a home is normally taxed on its assessed value,
an amount equal to a fraction of its appraised value.

Homeowner’s Insurance.
A necessity with any home purchase, you’ll want
to insure the value of your new home against fire, theft and perhaps even flood
damage. While flood insurance must be purchased separately, it’s important to
shop around for the best price, no matter what type of insurance you’re seeking.
Keep in mind that the cost of insurance can go up each year.

Private Mortgage Insurance.
If you put less than 20 percent down for
your mortgage, you’ll have to pay PMI, which protects the lender against your
defaulting on the loan. Again, you could be looking at hundreds of dollars each

4. Exterior maintenance.
You may love a property
because of its large yard and beautiful landscaping, but unless you have a green
thumb—and the time to commit to keeping the yard in top shape—you’re going to
need someone to come in and mow, weed and take care of those flowers and shrubs.
The last thing you want is for that picturesque outside to begin looking like a

5. Utilities. For those used to living in an
apartment—or even at home with mom and dad—things like water, gas, electricity
and oil may not have been a concern. But when you move into a new house, you
need to pay for all of these things, plus cable, phone and Internet service.
It’s always a good idea to ask the seller for their average monthly cost over
the last year so you know how much you should be putting aside for

Also, don’t forget that you’re most likely going to want to
make some changes or upgrades within the home, so make a list of all the
projects you’re considering—such as adding new carpeting, drapes or
appliances—and leave room in your budget for some of these costs each

For more information about the costs associated with purchasing a
home, contact our office today.


Reprinted with
permission from RISMedia. ©2013. All rights reserved.