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Eye-Openers for First-Time Homebuyers

When you are getting prepared to purchase your first home, there are a lot more financial considerations to be made than you may realize. If you have previously rented your living space, owning a home can be an eye-opening and costly experience.

Click through for 7 financial considerations I learned about as a first-time homebuyer…

  • Eye-Openers for First-Time Homebuyers 1 of 8
    Eye-Openers for First-Time Homebuyers

    Image source: Tobyotter

  • Home Affordability 2 of 8
    Eye-Openers for First-Time Homebuyers

    Be aware of what you can reasonably afford before you go house-hunting. The purchase price should be a priority when you start your search rather than just looking at the superficial factors like the number of bathrooms or the other amenities. Do the math on a mortgage calculator or talk with a loan officer about what price range you should be sticking with.

    Image source: Steve Slater (Wildlife Encounters)

  • Down Payment Amounts 3 of 8
    Eye-Openers for First-Time Homebuyers

    First-time homebuyers will need some form of down payment regardless of what kind of loan they get or who their lender is. Traditionally, lenders expect 20% of the home price to be in the bank during the loan process. Alternative loan programs may require less but is still a requirement.

    Image source: mikebaird

  • Closing Costs 4 of 8
    Eye-Openers for First-Time Homebuyers

    You have to pay a significant amount of cash to compensate the many companies doing work on your behalf when buying a home. These costs are known as closing costs and it could be several thousand dollars you need to have on hand at the time the sale transaction occurs. In some cases a buyer can get the seller to pay a portion or all of these costs. 

    Image source: Assassin de la police

  • Home Insurance 5 of 8
    Eye-Openers for First-Time Homebuyers

    As a renter insurance may not even have been a consideration but as a homeowner you'll definitely need coverage. Speak with several insurance companies about the cost of insurance so you know what to expect.

    Image source: ClickFlashPhotos / Nicki Varkevisser

  • Taxes 6 of 8
    Eye-Openers for First-Time Homebuyers

    Taxes are an important financial factor in homeownership so make sure you know who you owe based on your locations and relevant tax rules. You will need to have enough cash for property taxes, school taxes, and the like in addition to mortgage and insurance costs. 

    Image source: ClickFlashPhotos / Nicki Varkevisser

  • Maintenance and Repairs 7 of 8
    Eye-Openers for First-Time Homebuyers

    As a homeowner you will now be responsible for all maintenance and repair work that needs to be done on your home. You need to financially plan for regular maintenance to prevent major repairs while also stashing away cash for the unexpected emergencies that could happen at any time. 

    Image source: Dustin J McClure

  • Utilities and Such 8 of 8
    Eye-Openers for First-Time Homebuyers

    As a renter, many of your bills may have been included in the rent so be prepared for new monthly bills that now must be paid including sewer, water, garbage, and potentially larger bills for electricity and heat.

    Image source: ClickFlashPhotos / Nicki Varkevisser

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