Top Financial Questions for First Time Homebuyers

As a first time homebuyer, it’s only natural to put a lot of time and effort into finding the perfect property. However, you can’t make a confident decision until you have answered all the most important questions as they relate to your finances.

Here are some of the many financial questions that first time homebuyers need to address:

• What is your budget? Simply put, you need to know how much you are comfortable spending. Without this number in mind, you could find your search all over the place.
• Do you have enough money for a down payment? The days of buying a home with no money down are just about gone. If you’re in the market, you want to make sure you have money for a down payment, preferably 10 percent or more (20 percent allows you to avoid private mortgage insurance).
• Are you prequalified? Once a lender prequalifies you for a mortgage, you’ll have a better idea of how much you can spend and how the buying process will unwind once you are ready to move forward.
• Are you taking closing costs into consideration? You will pay a variety of expenses at closing, so make sure you get a better feel for what these are and how much cash you’ll have to part with.
• How much work does the home need? If repairs are necessary on day one, you need to take these into consideration when making an offer. You’ll need cash on hand to tackle these projects once you close on the property.
• Do you have a clear idea of the monthly expenses? For example, if you’re moving from a small home to a bigger one, your utility costs may increase. You need to think about this before you move, as you don’t want a surprise once your first set of bills begin to roll in.

These are not the only financial questions that first time homebuyers need to answer, but they are definitely among the most important.

Have you purchased a home in the past? Did you first answer these questions? Did you address any others? Share your feedback in the comment section below.