Buying a home can seem like an impossible task, especially when you start to learn about all of the other costs to consider that might not even relate directly to the home purchase. In today’s Money Checkup you’ll hear Part 2 of Christina Razzi’s episode where I will dive further into some of the costs to think about and consider when you are determining the amount of home you can afford. There are rules of thumb that most lenders tend to follow, but there are also other indirect costs and future costs you need to also be thinking about. I’ll also discuss how to ensure your new home purchase works within your personal cash flow so you can still reach current and future financial goals.
What We Will Cover
- Rules of thumb around home buying and the misconceptions they can present
- The first step in the home purchase price
- How debt-to-income plays into being able to buy a home
- Why you need to understand, in detail, your monthly spending
- Besides the down payment, other expenses you will need additional cash for
- Reserve requirements many lenders will require you to have on hand
- An in depth look at what goes into your monthly mortgage payment
- The additional payment to think about if your down payment is less than 20%
- When you can avoid private mortgage insurance (PMI) with less than 20% down
- The portion of take home pay you want your mortgage payment to be less than
- The importance of evaluating the change in your savings rate when buying a home
- Unexpected costs to think about when you own a home
- Changes in taxes that impact home purchase and property tax deductibility
- Why you might need a little cash left over after all home buying costs are considered
- Pitfalls to be aware of if you’re in the market for a new home
- Future family costs to also think about and factor in
- How to prepare your credit in order to buy a home
- How to know when to walk away from a home
Getting Connected With Anjali
Links Mentioned
Click here if you want to read the transcript instead!
