6 Critical Questions to Ask Yourself Before Buying Your First Home

Buying your first home is an exciting, rewarding and frightening time. You are thrilled that you have worked hard and are about to achieve the dream of homeownership, yet you know you are making one of the biggest commitments of your life. Here are 6 critical questions to ask yourself before buying your first home to help you breathe a little easier and put your mind at ease that you are as prepared as you can be for this new venture.Do I have enough for a down payment?There are mortgage lenders who will allow you to purchase a home with less than 20 percent down. In some cases, the purchase price of the home may be significantly lower than the value. If you put less than 20 percent down on the home, you may be required to pay private mortgage insurance (PMI) which can add a few hundred dollars to your mortgage payment each month. If you do not have 20 percent of the purchase price for a down payment, ask your lender if you will be required to pay PMI.Do I plan to live in this house for many years?In most real estate markets, you will need to remain in your home for several years in order to increase the value of the home enough to sell. You don't want to sell your home for less than you put in as a down payment. Selling too soon could even mean you have to add money to cover the realtor fees.Can you handle minor home repairs on your own?If you are considering an older home and are not able to handle minor repairs, you may bite off more than you can chew. Older homes will have maintenance issues that a newer home may not. Buying an older home if you are not handy is fine if it is what you want, but you will need to keep money in the budget to pay someone for repairs.How much will it cost to live there?It is important to remember that the mortgage payment is not the only cost you must consider. Be sure to ask about property taxes, insurance rates and utility costs. Remember that taxes vary greatly from one location to another, so don’t assume that just because you are moving across town the taxes will remain the same.Do I have the furniture and equipment I need for this house?If you are moving from an apartment to a house, you probably don’t own a lawnmower. The house may be much larger than the apartment, so you don’t have furniture to fill every room. Curtains, blinds and decorations can be very expensive. These are expenses you will need to plan for before you decide to buy.How much is in my emergency fund?One thing that many people do when they purchase their first home is to wipe out their savings account completely, either for the down payment, closing costs or buying new items for the home. This can lead to financial disaster if something should go wrong. Cars break down, children get sick and water heaters stop working. Always keep an emergency fund available for unexpected expenses.These six questions can help you enter into new home ownership with your eyes open and help you be better prepared. Going into home ownership with these questions answered is the best way to make the process more simple and painless.