Legendary comedian and satirist George Carlin once quipped, "The meaning of life is trying to find a place for your stuff." When you've run out of space and need more stuff, your next step is deciding if you want to rent or own that space. But how do you know if you're ready to buy?
What Can You Afford?
Before applying for a home loan, it's helpful to know how much financing you may need.
Determine the features you're looking for and browse listings in your area to get an idea about home prices. You can also contact your local appraisal entity or a real estate agent to get a history of appraisal values for any particular homes you're interested in.
Expect the Unexpected
If you make it through the financing process and find or build a new home without running into any complications, you're well ahead of the curve. Ultimately though, unexpected events can wreak havoc on homeowners.
When you have a landlord, you don't have to worry about the cost of home repairs and maintenance. Getting financed for a home loan with a payment you can afford is great, but ask yourself if you'll have the additional resources to address issues such as broken water lines, electrical shorts or other problems.
How much will you pay for insurance to protect your home against theft or natural disasters? Also, keep in mind that homeowners are responsible for paying taxes to various city and county entities.
You can contact your local tax office to get an estimate of the yearly taxes for an area, or a specific home. Furthermore, most utility companies will provide the same service to help you determine a monthly utility estimate.
It's Not Just About the House
New homeowners face many incidental expenses that may not be factored into their initial purchasing budget.
Will you need to hire a moving service? What about new furniture and appliances, or renovations to the house? Will there be activation fees for utilities or amenities such as telephone, Internet and television service? If your new home has a lawn, will you buy the equipment to manage it yourself, or pay for a lawn service?
Also, many neighborhoods may have mandatory homeowner associations with yearly dues. Talk to friends or family members about their experiences with moving into a new home. This will help you determine what other expenses you might need to plan for.
Ultimately, you need to go into the home buying process with your eyes wide open. A local real estate agent can be a great place to start if you think you're ready to make the jump to home ownership.