October 05, 2009

First Time Home Buyer Reality Check - Affordability

As I mentioned in my September Net Worth Udpate, I am planning to start my property hunt for the first time. So, first question comes into my mind is, "what can I afford"?

There are two types of costs in buying a home -- the initial down payment and the ongoing monthly mortgage payments. The largest one-time cost is the down payment.

When purchasing a home, there are also many one time costs and monthly expenses that I will need to budget for in addition to the expenses that I have while renting.

One-time Expenses:

Property inspection (optional), due at time of inspection
Legal fees, due at the time of closing
Legal disbursements, due at the time of closing
Property survey (sometimes provided by seller), due at the time of closing
Mortgage interest adjustment (if applicable), due at the time of closing
Home and property insurance, at closing and ongoing
Moving expenses, due on the date of move

Monthly Expenses:

Mortgage payments
Maintenance/Condominium fees
Property and content insurance
Property taxes