Sabtu, 28 April 2012

Adding Up the Costs of Home Ownership

The time may come when renting an apartment, condo or house is no longer suitable, and the idea of purchasing a home changes from dream to reality. Seizing the American Dream is one of the biggest purchases one will ever make in life. Before engaging a real estate agent and touring open houses every weekend, review the checklist below. Being able to answer "yes" to these questions will help determine whether the time is right to make such a big move:

An established source of steady income for at least the past two years, that is very likely to continue

Tax returns have been filed each year as required by federal and state law

Bills and other financial obligations are within budget and regularly paid on time

The down payment, closing costs, and other related fees to purchase a home have been saved up (check with a financial institution to see whether any first-time-buyer or other programs are available that could help cover certain expenses relating to purchasing a home)

Money for moving expenses has been saved up (and/or good friends have been tapped to lend a hand)

Anticipated mortgage, property taxes, insurance, homeowners' association fees (if applicable), and other expenses are affordable for the long term

Money is available to pay for additional (and likely higher) utility bills if the new home is larger than the previous rental; also, additional expenses for lawn and garden equipment, or a gardener

Money is available to purchase additional furniture, appliances, and other household items

Money is available to cover ongoing maintenance and home repairs

Everyone involved has the time, energy, and desire to take care of a house (or ability to hire others to do perform those tasks); it seems obvious and sounds simple, but not everyone wants the ongoing responsibility of caring for a home's upkeep

A good homeowners insurance policy has been selected to cover the new castle. Homeowners insurance is a requirement by any mortgage lender and an essential component of protection. Coverage offers homeowners protection from financial losses related the owning the home, e.g., losses due to fire, vandalism, and hail, as well as theft and liability in most cases. Coverage for damages resulting from a flood requires a separate flood insurance policy or rider. Talk to a professional insurance agent about a homeowners insurance policy with the right features and benefits, as well as any riders that are appropriate.