There's a good issue of Money Magazine on newsstands now.
On the cover it has this headline: "The 5 Questions to Ask Before You..."dot dot dot. And then it has categories like Switch Jobs and Invest in Stocks. But we're going to share with you, the 5 questions to ask before you Buy A Home. It's the biggest single purchase you're likely to make, so ask yourself:
#1. How much debt can I handle? The traditional guidelines say your total debt including your house, car, credit cards, and other bills should be no more than 36% of your gross income that means before taxes. So let's say you earn $50 thousand dollars a year. Your mortgage shouldn't be higher than $1200 a month. If it's more than that, you could be setting yourself up for trouble.
The second question you need to ask before you buy a home is: How much will it cost to live here? Things break, roofs leak, termites can move in. So set aside 1% of the home's value for annual maintenance.
Question #3 is: How much house do I need? Don't dream too big. I know you want the 4 bedrooms and the swimming pool - But you need to be able to pay your mortgage and put money away for retirement or your kid's college. So maybe the 3 bedroom place with the garden is a better choice.
The fourth question to ask before you buy a home: What is the history of the house? If the house has a history of insurance claims, don't buy it. It may be uninsurable or the insurance may be more than you can afford.
And the final question to ask before you buy a home: Who would buy this house from me? Because really, your home is only worth what you can sell it for. So if it's a fixer-upper that you don't plan on fixing up or it has a view of a landfill that doesn't bother you it might really bother perspective buyers. So look at the house not only from your point of view, but the point of view of the people who will buy this house when you move on.
#1. How much debt can I handle? The traditional guidelines say your total debt including your house, car, credit cards, and other bills should be no more than 36% of your gross income that means before taxes. So let's say you earn $50 thousand dollars a year. Your mortgage shouldn't be higher than $1200 a month. If it's more than that, you could be setting yourself up for trouble.
The second question you need to ask before you buy a home is: How much will it cost to live here? Things break, roofs leak, termites can move in. So set aside 1% of the home's value for annual maintenance.
Question #3 is: How much house do I need? Don't dream too big. I know you want the 4 bedrooms and the swimming pool - But you need to be able to pay your mortgage and put money away for retirement or your kid's college. So maybe the 3 bedroom place with the garden is a better choice.
The fourth question to ask before you buy a home: What is the history of the house? If the house has a history of insurance claims, don't buy it. It may be uninsurable or the insurance may be more than you can afford.
And the final question to ask before you buy a home: Who would buy this house from me? Because really, your home is only worth what you can sell it for. So if it's a fixer-upper that you don't plan on fixing up or it has a view of a landfill that doesn't bother you it might really bother perspective buyers. So look at the house not only from your point of view, but the point of view of the people who will buy this house when you move on.
