If you are currently renting a home or apartment, you may be wondering if you are paying more in rent than you would if you had a mortgage. Often, rent prices are higher than a monthly mortgage payment, and this leads renters to believe that owning a home would be cheaper in the long run. And while our team at GVC Mortgage does believe in the benefits of owning a home, it is important to do your research beforehand to make sure you can afford the additional costs that come with owning a home. Read on to learn if you can truly afford to own a home.
In our previous blog post, we spoke of the costs that are associated with closing on a home. The application fee, appraisal fee, underwriting fees, as well as your down payment, are necessary to secure a mortgage on closing day. These fees are important to keep in mind as you prepare to purchase a home. Because even though you may be able to afford the monthly mortgage payment, without a little money saved up, you won’t be able to afford the home-buying process.
The next consideration is the expenses a homeowner is responsible for that a renter is not. These expenses include things like utilities, insurance, property taxes, and HOA fees. While you may be used to paying some utilities and insurance, it is very likely that these amounts will go up significantly, and you will be responsible for the entire amount. To get an idea of what these amounts will be, have your real estate agent speak to the former homeowners and get an estimate of what their average monthly bills were when they lived in your home.
Finally, along with the ongoing fees of owning a home, you’ll also have a number of new expenses to prepare for. In the past, if something broke in your home, your landlord would be responsible for all repairs, however, this is no longer the case. As the homeowner, you are now responsible for all repairs, maintenance, and renovations of your home. This can be a bit of a rude awakening for some first-time home buyers the first time something major breaks down and they have to pay for it.
As you consider making the transition from renter to homeowner, feel free to contact the experts at GVC Mortgage for more advice. We can determine whether you qualify for a home loan, and what your mortgage options are. Contact us in Indianapolis today at (317) 564-4906.