My college professor once said that you know when you’re an adult when you have a mortgage. His comment couldn’t be farther from the truth. Although for many people, homeownership is a significant milestone in their lives. Not knowing the right questions to ask when buying a house is financially unwise. There are many factors to consider during the home-buying process. After all, buying a home most likely will be the biggest purchase ever in your life. Unfortunately, I wish I had thought of more things when I purchased my first home. After signing all the closing documents for my first home, I recall the escrow agent shaking my hand, saying, “Congratulations. You’re in debt.” We all laughed together. However, after owning six houses, three of them being flipped investment properties, I wish I had done things very differently my first time around. So, learn from my mistakes, and be sure to ask these eight important questions when buying your first or next house. Questions To Ask When Buying a House 1. How Much Can I Afford? This question may seem to be the most obvious every potential homebuyer should ask. But, unfortunately, it’s not unheard of for a person to fall in love with a house for sale without looking at their finances. So, although they may have a huge, beautiful house, they may not have the money to meet their other needs. This situation is often referred to as “house poor.” Pre-approval Letter Unless you have hundreds of thousands of dollars willing to spare, you most likely will be financing your home purchase. Therefore, one of the first steps a new home buyer should take is to speak with a mortgage lender and request a pre-approval letter. The pre-approval letter will let you know how much a lender is willing to lend you. However, the amount on the letter shouldn’t dictate what you can buy. Instead, it will let you know what you can’t buy. It’s one of the first steps you should take to filter out houses above what the bank is willing to lend. Mortgage Payment Following the assumption you’ll be financing your house purchase, the mortgage payment is the monthly payment you’ll be making to the bank. The mortgage payment consists of two parts: principal and interest. And, depending on how much you put towards a down payment, you may also be required to pay private mortgage insurance. As a result, you’ll spend most of your homeownership years paying interest versus paying down the principal. Most online real estate marketplaces, such as Zillow and Realtor, offer a feature to calculate the monthly mortgage payment. All that is needed for you to provide along with the asking price is your planned down payment amount, the term (i.e., 20 years, 30 years), and interest rate. As a general rule of thumb, the mortgage payment should not be more than 30% of your household income. So, for example, if your monthly net income is 500, then the mortgage payment

Would you “waste money” on something of questionable value? Something that receives only a passing glance or less, that is fleetingly or not at all appreciated, that is mostly discarded within days and is often a mere obstacle to the prize within? I bet you would and have, possibly multiple times a year. I try to resist, but it is fruitless, we are cornered. There are other ways to approach the situation, but most of […]