With interest rates remaining at historical lows, buying a home still provides a benefit over leasing or renting for your primary residence. Your monthly mortgage payment should be lower than what it would cost you to lease the property today. With the low down payment options provided by most lenders today, you can get into a property with an FHA loan for 3.5% down or Conventional loans for as little as 5% down! However, it is critical for you to speak to a professional lender so you understand all of your options and costs.
When looking for your next home, consider these 4 costs before you get started:
1) Mortgage Payment – and what else is included in that number!
This is the first step to creating your monthly budget for your path to home ownership. Your mortgage payment is a direct reflection of the loan amount. When the lender provides a pre-qualification letter, make sure you have them include all of the additional items included in your mortgage payment…not just the home loan amount. The full mortgage payment includes: property taxes, insurance on the property, mortgage insurance (if applicable), and of course, interest.
Today, for homes in Arizona, an FHA Loan will require private mortgage insurance. This loan for a home in Arizona allows you to put as little as 3.5% down, and have a loan up to $271,050. Here are a handful of properties in Phoenix and Scottsdale that are available with an FHA Loan.
2) HOA and Utilities Costs
While your mortgage payment should be the largest amount of your monthly bills, let’s not forget Home Owners Association dues and utilities costs when budgeting for your new home. Depending on the purchase and location, your Home Owners Association dues can be increasingly expensive. If you want to live in a gated community, with a community pool, and well-kept grounds, there is typically a price for those amenities. Some HOA’s will include some utilities, so make sure you call the association to get the list of expenses you will be responsible for in addition to your HOA. Not all communities are part of an HOA, so ask your Realtor to explain the positives and negatives of living in an HOA community. Click here to see Angels RE Featured properties, which include properties in an HOA, and those without an HOA.
3) General Maintenance
Homeownership comes with plenty of perks as well as quite a bit of responsibility. Now, when something breaks, you have to fix the problem, at your expense. Proper maintenance of the home is critical to keep your property value up, as well as limit the future expenses with the home. When purchasing a home, your Realtor should make sure you have a Home Warranty for at least 1 if not 2 years from the time the home closes. The Home Warranty will save you money should something break during the warranty period. If nothing else, it creates some peace of mind. Homes in Arizona have different maintenance issues than those in different parts of the country. For example, a home with a flat roof in Scottsdale may require additional maintenance than that of a pitched tile roof in Michigan. The Arizona heat can be tough on the roof, stucco walls, and patios. Keep these costs in mind as you are looking for your next home.
4) Decorate and Renovate
Regardless of how “perfect” your new home is when you purchase, you will always want to make changes and additional improvements to make your house your own. The good news is you can do this over time. Remember items like window treatments, paint colors, flooring, and appliances while looking for your new home.
Angels RE’s team of full-time Real Estate Agents are ready to walk you through the home buying process. The above list is just a quick version of what they will explain to you when you are ready to start looking for your new home. They have a team of experts in the lending, insurance, and home warranty fields to make sure your home buying questions are answered professionally, with your best interest in mind. Any questions? Just email info@AngelsRE.com and one of the Angels will have an answer to your question in just a couple of hours.
