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Buying a Home

Preparing for Homeownership

Purchasing a home can be a very exciting experience. With this excitement comes a series of challenges that you will need to be prepared for. The following steps will help you determine if you are ready to buy a home and help you understand the process. If you would like to download all of the steps in one document, click here.

If you are ready to begin your eHome America pre-purchase education, click here to begin. There is a charge for this program.


Step 1 - Is Homeownership Right For You?

You may think you would like to own your own home, but have you carefully weighed the advantages of homeownership against its disadvantages? Below are some of the things to consider when thinking about owning a home versus paying rent.

HOMEOWNERSHIP

RENTING

Building Equity

Building Equity

Equity is the portion of your home’s value that you own “free and clear.” Equity is calculated by subtracting the amount you owe on the home from the home’s actual value. Home equity can help secure future loans for college, major home improvements, or business needs.  For many, paying rent is a transitional phase until the renter can afford his or her own house. Renters do not build up the financial security that comes with home equity. 

Tax Benefits

Tax Benefits

Homeowners can deduct their mortgage interest every year from their taxes. Borrowers should consult a qualified tax advisor to determine their specific tax benefits. Renters do not receive tax advantages. 

Home Maintenance

Home Maintenance

Homeowners are responsible for any and all repairs to the home. A homeowner should be able to make a house payment and still have money left over for minor repairs. Savings to cover major repairs—such as plumbing and electrical work—is also a must. This increased responsibility gives homeowners the freedom to make changes to their homes, provided that they follow building codes, local zoning and neighborhood covenants

Renters have fewer financial responsibilities for maintaining appliances, repairing their homes, or keeping up the condition of the exterior and interior of the residence. However, renters are also limited in their ability to alter their housing to their needs or desires.

Amenities

Amenities

Often, first-time homebuyers have to wait quite a while before they can afford to purchase amenities for their homes. Renters sometimes enjoy greater amenities, such as swimming pools, exercise rooms, cable television, party rooms, kitchen appliances, etc. 

Up-Front Costs

Up-Front Costs

Homeowners should be prepared to pay 3.5 to 5.0 percent of the home price on closing costs and down payment. If homeowners want to break even from these costs, they should plan to stay in the home at least three to five years. In addition, the first year or two of a person’s mortgage are usually the toughest. Often, it is during this time that the majority of a new homeowner’s cash is tied up paying for rehabilitation, repairs, or furnishings. Renters do not need as much money as homeowners to move into a home. A typical rental deposit does not exceed one month’s rent, and is therefore considerably less than the 3.5 percent of the sales price on a house that is often required as a down payment. 

Monthly Housing Costs

Monthly Housing Costs

Housing costs for homeowners with fixed-rate mortgages will remain stable over time, providing stability and predictability. 

Through amended or renewed lease agreements, landlords can increase the rent on a regular basis. This can be an issue in real estate markets where rental costs are high or rapidly increasing. 

Market Risks

Market Risks

Homeowners experience greater financial risk due to real estate market fluctuations, increases in property taxes, etc. Renters are less impacted by fluctuating real estate markets. The market may result in increased rent, but landlords cannot increase rent before negotiating another lease. In comparison, a homeowner can lose thousands of dollars if the real estate market fluctuates greatly.

Mobility

Mobility

Finding a home in a neighborhood that is right for the buyer can result in a sense of fulfillment, belonging and community. However, if a homeowner resells the home in less than three to five years, he or she will likely not recover their closing and down payment costs. 

If renters do not like the neighborhood, the city, or their neighbors, they can easily fix the situation by moving. While renters must follow the terms of their leases, providing a 30-day notice can make moving possible.


Step 2 - Can You Afford To Own A Home?

In order to buy a home, you must either have money saved, or you must be able to borrow money to purchase your house. Most people need to borrow money to buy a home, in which case you must be “mortgage eligible.” Being mortgage eligible means that you qualify to borrow enough money to purchase a home. How you answer the following questions will help you determine if you are mortgage eligible:

Do You Have a Steady Income?

Documented income from a minimum of two years of employment is required for a mortgage loan. If you receive assistance such as social security, it must have a documented two-year history and projected two-year future, similar to a job.

Income may include:

  • Salary or wage from a job
  • Social security benefits
  • Survivor benefits for children under 18
  • Money from a trust account
  • Documented child support
  • Net profits from a business, self-employment

Income does not include reimbursable items such as:

  • Food stamps
  • Unemployment benefits
  • Cash labor (undocumented)

Lenders will sometimes consider “compensating factors” that may offset certain aspects of your situation that may be weaker than what is typically preferred. Compensating factors can include:

  • Amount of time at current place of employment and projected duration of employment with current employer
  • Part-time job that cannot be used as qualifying income
  • Child support income
  • Large down payment
  • Current cost of housing is more than projected mortgage payment

 
Do You Have Savings for Down Payment and Closing Costs?

Typically, it is necessary to have a minimum of 3.5-5.0 percent of the home price available for down payment and closing costs. Making regular deposits to a savings account is a good way to save for these costs. If you are within certain income limits, MFA has down payment and closing cost assistance programs that could help you buy a house with just $500 of your own money. Talk to an MFA participating lender to learn more. A link to MFA's lender list is on the menu bar on the first page of the Homebuyers section of this web site.

Examining Your Debt

While you may have determined that you are financially stable, you must examine your debt before you can take on the financial burden of owning a home. Can you truly afford a home, or will your debt prevent you from being able to comfortably make monthly mortgage payments? In this case, debt refers to those bills or outstanding balances that accrue interest. This includes items such as:

  • Car payments
  • Student loans
  • Credit card bills
  • Other installment loans such as a title loans
  • Personal loans

Debt does not include expense items such as rent, utility bills, telephone, etc.

Click here to use a mortgage calculator to find out what price home you can afford and how much your payments will be.


Step 3 - How Is Your Credit?

Credit scores are one of the most important factors in qualifying for a mortgage loan. The higher your credit score, the more likely you are to qualify for a mortgage and the more favorable your interest and insurance rates will be. A borrower with good credit has:

  • No unpaid judgments or liens
  • No foreclosures within 10 years
  • No bankruptcies within the last two years
  • No unpaid bills
  • No slow or late bill payments within twelve months prior to applying for a mortgage
  • No delinquent child support obligations

If you don't have good credit, you don't have to give up on buying a home. MFA has homeownership counseling partners that will help you repair your credit so you can qualify for the best mortgage loan possible. See the list of counseling agencies by going to the link on the menu bar on the main page of the Homebuyer section of this web site. 

It is preferable for a homebuyer to have at least four good credit references when qualifying for a loan. Traditional credit references include:

  • Car loans
  • Credit cards
  • Student loans
  • Personal loans

Sometimes, for those who have limited established credit, non-traditional credit references can be used, depending upon lender requirements. Non-traditional credit references can include:

  • Rent payments
  • Utility payments
  • Phone payments
  • Storage payments
  • Title loans
  • Car insurance payments

Credit Scores

In general, when people talk about “your score,” they are talking about your current FICO® score. The term "FICO®" refers to a credit scoring system developed by Fair Isaac & Company. It was developed in the 1950’s as a tool lenders can use in determining the creditworthiness of the prospective borrower. It calculates the statistical likelihood that a borrower will or will not pay a debt. FICO® scores range from 300 to 850. The higher the score, the more attractive the interest rate the homebuyer will receive.

FICO® scores are believed to provide the best guide to future risk based solely on credit report data. The higher the FICO® score, the lower the risk of default. At the same time, no score can predict whether a specific individual will be a “good” or “bad” customer. And while many lenders use FICO scores to help them make lending decisions, each lender has its own strategy including the level of risk it finds acceptable for a given credit product. There is no single “cutoff score” used by all lenders, and there are many additional factors that lenders use to determine your actual creditworthiness and interest rate.

When you apply for a loan, you authorize your lender to ask for a copy of your credit report. This is how inquiries appear on your credit report. The inquiries section contains a list of everyone who has accessed your credit report within the last two years. The report you see lists both “voluntary” inquiries, spurred by your own requests for credit, and “involuntary” inquires, such as when lenders order your report so as to make you a pre-approved credit offer in the mail.

Three major credit reporting agencies, Equifax, Experian, and TransUnion, provide FICO® scores to lenders. FICO® scores have different names at each of the three credit reporting agencies. Credit reporting agencies also collect public record information from state and county courts and information on overdue debt from collection agencies. Public record information includes bankruptcies, foreclosures, suits, wage attachments, liens, and judgments.

Checking Your Credit Report

Potential homeowners should request a copy of their credit report before applying for a mortgage loan. You are entitled to a free copy of your credit report each year from all three credit reporting agencies. If there are inaccuracies or errors in your credit report, you can request that the credit reporting agencies review your credit report and make corrections. Your free credit report does not include your credit score. You can obtain a copy of your credit score separately, but you will have to pay a small fee.

Federal law requires each of the three nationwide consumer credit reporting companies - Equifax, Experian and TransUnion to give you a free credit report every 12 months if you ask for it. They also make it easy to accomplish many credit-related tasks right from your computer. You can access your free credit report at https://www.annualcreditreport.com.

You should make sure the information in your credit report is correct. Not only is your credit score based on this information, but lenders also review this information in making credit decisions. If you find an error, the credit reporting agency must investigate and respond to you within 30 days. If you are in the process of applying for a loan, immediately notify your lender of any incorrect information in your report. Your lender will need to reorder your credit report and score once any changes have been made to your credit file. Small errors may have little or no effect on your score. If there are significant errors, however, the lender may disregard the score.

Improving Your Credit Score

Raising your credit score takes time and there is no quick fix. In fact, quick fix efforts can often backfire. The best advice is to manage credit responsibly over a period of time. Click here to find tips for improving your credit score. 


Step 4 - Getting Pre-Qualified

If you have decided that homeownership is for you, the next step is approaching a lender to become pre-qualified.  A mortgage loan officer takes many variables into account when they pre-qualify a prospective homebuyer. Credit score, current salary, employment history, and current debt are major factors in the approval process. Below are basics to understand and questions to ask as you go through the process. 
 
As you go through the process, it is important to note that lenders often pre-qualify a homebuyer for a loan amount that exceeds the comfort level of the borrower. It is the homebuyers’ responsibility to tell both the lender and the real estate agent if they wish to spend less than that amount.
 

Understanding Home Buying Ratios

Your home buying ratios, in combination with your credit or FICO® score, are the most important factors lenders consider when you apply for a home mortgage loan. Lenders use two common ratios to determine the maximum home mortgage loan amount they will allow you.
 
The first ratio lenders use compares your total monthly housing costs with your total monthly gross income. Your expected monthly housing costs, including mortgage principal, interest, taxes and insurance (PITI) should not exceed 28 percent of your income. PITI includes property taxes, hazard insurance and mortgage insurance payments. Keep in the mind that taxes and insurance vary from county to county.
 

The second ratio lenders use is your debt-to-income ratio (DTI). Your total monthly debt, including your expected PITI, credit card, and other loan payments, should not exceed 41 percent of your gross monthly income. The actual percentages vary by lender and home mortgage loan program, but keep in mind that your goal is to arrange a mortgage that best suits your needs without creating a financial burden.

Understanding Private Mortgage Insurance (PMI)

Private Mortgage Insurance (PMI) protects the lender from the expense of foreclosing on the property if you default. If you buy a house with a conventional mortgage, and you make a down payment of less than 20 percent, in most cases you will be required to pay for PMI.

The insurance benefits the lender, but the borrower pays for it. The premiums for PMI are added into the borrower’s total monthly mortgage payment. The cost of PMI varies, depending upon the size of the mortgage and the percentage of the down payment.

Understanding Mortgage Loans

There are a number of loan products available to low- and moderate-income buyers. The majority of loans that these homebuyers use come from the following sources:

Interest Rates

Another factor that affects the amount you can borrow is interest rate. The lower the interest rate, the higher the amount you can borrow. The higher the interest rate, the lower the amount you can borrow. 

Buyer Beware! Recognizing Predatory Lending Practices

Predatory lenders take advantage of consumers with credit problems and those who fail to safeguard their own financial transactions. These lenders charge extremely high fees and interest rates. A loan from a predatory lender will cost you much more throughout the life of the loan and—in extreme cases—could lead to foreclosure on your home. Predatory lenders take advantage of those borrowers who are not able to secure lending from traditional financial institutions.
 
Remember that you are responsible for protecting your own financial well-being. Do not transact any business with a lender who pressures you sign documents you haven’t read or don’t thoroughly understand.
 
Predatory lenders often employ very aggressive, and sometimes deceptive, marketing campaigns. Their goal is to reach those individuals who, for any number of reasons, would be more likely to agree to apply for a loan. Once they have identified a potential customer, they try to reach them by mailing, phoning, and even visiting them in their homes to encourage them to take out a loan.
 
This initial loan is sometimes just an entry point into the financial life of the homeowner. The loan has an artificially high interest rate and monthly payment, so that the predatory lender can offer an opportunity to refinance it, along with other debts, with another loan. The predatory lender’s ultimate goal is to get the homeowner to refinance their first mortgage with them.
 

Questions to Ask Your Mortgage Lender

Click here to learn what questions to ask your mortgage lender to make your homebuying experience easier and more efficient. 

Step 5 - Shopping For Your Home

After applying for a mortgage loan and receiving a commitment letter from the lender for a maximum loan amount, the next step is to shop for your home. There are a variety of ways to find a home that is right for you. The most common is to use a licensed real estate agent or real estate broker. The real estate agent should be a homebuyer’s agent, a licensed real estate professional that works on your behalf in the home buying process. If the agent is not a homebuyer’s agent, you must be aware that s/he works on behalf of the seller. Real estate professionals should disclose the exact nature of their relationship with you up front. You can utilize the following resources to aid in your search for a real estate professional:

  • Referral from a friend or relative
  • Web searches
  • Real estate web pages
  • Real estate advertisements in newspapers
  • Open houses
  • State, county, or city housing departments
  • Nonprofit housing agencies

Real estate agents will probably ask that you begin working with a lender in order to get pre-qualified. If a buyer is pre-qualified, then the real estate agent knows that they’re serious about making a purchase.

Deciding Which Home to Buy

You should make a list of the practical requirements of your home such as number of bedrooms, number of bathrooms, size of yard, desired neighborhood, etc. If you are using a real estate agent to help you purchase a home, they will likely search on the Multiple Listing Service (MLS) for homes that match these criteria and fit within your approved mortgage loan amount. The printout of this MLS will also show other useful information such as available financing, average annual cost of utilities, etc. Remember to communicate clearly to your real estate agent the amount you wish to spend, especially if it is less than the amount for which you’ve been pre-approved. It is important that you stay in control of this process.

When you decide to look at the house, you should consider many things:

  • Neighborhood and community: Is this the type of neighborhood in which you and your family desire to live? How well will the area fit with your lifestyle? Factors affecting this decision include school districts, zoning, restrictive covenants in planned communities, amenities, access to public services, character, and future economic well-being of the community.
  • Neighbors: Do the neighbors seem agreeable and cooperative? Do they keep their own property in good repair? Do they throw loud parties on Friday nights? Are the surrounding homes occupied by renters or homeowners? Rental units sometimes change hands frequently, and could result in less overall stability for the neighborhood. Be sure to drive by the property on several different occasions to see what the neighborhood is like on the weekends, at night, or during morning rush-hour, for example. You’re trying to get a feel for whether you could live there on a long-term basis.
  • Proximity to work and school: Is commuting a long distance undesirable to you? Would you like your children to be able to walk to school? Make a note of the distance and time it takes you to get to your usual daily destinations from the home. Is the major arterial street to the home congested at most hours? Is it dangerous? How accessible is it?
  • Maintenance requirements: Is the home going to require major repairs? Does it need cosmetic repairs? Can you afford these repairs? Industry professionals strongly recommend that prospective buyers order a home inspection and make their purchases contingent on a satisfactory inspection.
  • Practical versus unrealistic requirements: Does the home have what you need for you and your family, such as an adequate number of bedrooms and bathrooms, the right size back yard, etc.? How does this house compare to other houses you’ve looked at? Perhaps you and your family members should think about rating each house on a scale of one to 10. This method may help you narrow your focus and get closer to a final decision.

Step 6 - Understanding Manufactured Housing

Manufactured housing has come a long way since trailer homes. Prospective home buyers have a variety of options from which to choose, including square footage, floor plan, color scheme of the décor, and finishing materials. Each manufactured home is built to conform to a federally regulated HUD code rather than to local building codes which are enforced at the home destination site. Manufactured homes are usually less expensive than a “stick built” home. This is due to the fact that manufactured homes are pre‐built and then moved to the homeowner’s land or a manufactured housing subdivision or mobile home park. Prospective buyers should consider a number of factors before investing in a manufactured home.

Purchasing a Manufactured Home

If you are considering the purchase of a manufactured home, you should give special attention to the following:

Where to purchase your home: If possible, buy your manufactured home directly from a manufacturer’s retail outlet. Shop around to find a manufactured home that you like. Negotiate your price. You may want to check with the Better Business Bureau to ensure the manufacturer is reputable and reliable.

Roof: A shingled roof can be better than a metal roof, as it can prevent leakage problems and improper ventilation.

Walls: Vinyl siding is best for manufactured homes, as it can eliminate some of the common leakage problems that may occur with metal or hardboard siding. Exterior wall studs should be 16 inches apart, and walls should be at least 7 feet high.

Plumbing: Plumbing systems tend to cause the most problems in manufactured homes. It is worth the upgrade to have the best quality plumbing fixtures for each faucet and sink and to be sure there are shutoff valves at each plumbing fixture. Nearly one out of three manufactured home owners report plumbing problems.

Windows: To prevent water damage, windows should have welded vinyl frames and be insulated with double panes. The frame corners should be fused together instead of screwed or glued.

Floors: Floors should have 2x8 joints spaced 16 inches apart. They should also have plywood sub- floors. Particle sub-floors do not provide adequate water resistance.

Climate control: For the cool climate of northern New Mexico, it is advisable to choose a home with heating and cooling outlets around the edges of the room, preferably along the exterior walls. A manufactured home in northern New Mexico should meet Wind Zone 2 and Thermal Zone 3 governmental standards. Southern New Mexico residents should choose a home with air outlets in the ceiling. A manufactured home in southern New Mexico should meet Thermal Zone 2 standards.

The underside and foundation: The bottom of your home should be well ventilated and have a protective skirting placed around it. A solid foundation is essential to protect your manufactured home from structural damage. Be sure supports rest on deep concrete pads or footings not directly on the soil. Certain loan programs, such as VA and FHA, have some very specific requirements as to how the home should be attached to the foundation. Be sure to ask about the exact requirements that will apply to your situation. Also, make certain that the person doing the work is qualified, licensed, and approved by the lender.

Warranties: Choose a manufacturer that provides a long-term warranty with few exclusions.

Costs to Consider When Purchasing a Manufactured Home

Manufactured homes may offer low initial maintenance costs. It is important to remember that the price does not include a site for the home. The site must be rented or purchased separately. In order to provide a mortgage loan for a manufactured home, lenders require that it be secured to a permanent foundation. Also remember that a manufactured home is more likely to appreciate in value if you own the land to which it is attached. Further, proper transportation of your home is critical. Every manufacturer must provide instructions explaining how to prepare the home site and install your home. Get a copy of this guide and read it before your home is installed. If possible, be present when it is being installed. Bring the installation guide and follow what the installer is doing. Make certain that your installer is qualified and appropriately licensed.

Sometimes the seller will combine all related costs into the sales price. Be certain to ask for an itemized statement which shows you the breakdown of what you’re paying. Ask questions until you have a good understanding of the overall price structure. Remember to negotiate the price and always ask the following questions:

  • What is the cost of the home itself?
  • What is the cost of a site for the home?
  • What are the costs for utility hook-ups and other infrastructure needs?
  • Is there a transportation fee to move the home to the site?
  • Is hazard insurance affordable and easily available?

Step 7 - Buying Your Home

Once you’ve found a home you want to buy, you will be ready to make an offer. Your real estate agent will help you prepare a purchase agreement and submit it to the seller. The seller, and you as the buyer, can make counter offers until a final price and conditions of sale are agreed upon. During these negotiations, you and the seller will also decide upon a period in which to close the sale. During the closing period, typically 30-90 days, you and the seller will have time to complete home inspections and make agreed upon repairs to the home. Your closing date is the day you and the seller will sign final documents transferring ownership. At that time, you’ll receive the keys to your new home!

Negotiating a Purchase Agreement

Buying a home requires solid negotiation. Successful negotiation is more than luck or natural talent. It requires the learned ability to use certain skills and techniques to bring about win-win results for the homebuyer and seller. Click here for tips for a successful negotiation. 

Understanding Home Inspections

It is recommended that you pay for a home inspection before you buy the home. You should make the purchase contingent on a satisfactory inspection. Home inspectors will evaluate the structural aspects and certain mechanical systems of the home. They primarily inspect the foundation, roof, plumbing, electrical, and heating and cooling systems. But, services vary widely, so be sure to communicate just how thorough an inspection you want. The more detailed the inspection, the more costly the service. Always seek out a qualified and licensed home inspector with a solid reputation for standing behind his or her work. Any warranties offered should be given to you in writing. Also ask about having the home inspected for termites, radon, or other potential environmental hazards.

Keep in mind that if you do make the purchase of the home contingent on a satisfactory inspection, you need to specify a dollar amount of liability. For example, the seller may agree to a contingency clause with a liability limit of $500, meaning that the seller will make repairs or replacements only up to that dollar amount. The inspection report will recommend certain repairs, if needed, with an estimated cost for these repairs. If the estimated cost of repairs is beyond the agreed upon cap of liability, the seller is not obligated to meet those repairs and the purchase agreement is void. The buyer usually pays the cost of inspections.

Understanding Homeowner's Insurance

You will be required to secure homeowner’s insurance before closing on your mortgage loan. It is important to purchase a homeowner’s insurance policy that fits your particular needs. When you shop around, you’ll want to ask for replacement cost coverage insurance. This insures your home’s replacement cost, not its market value. The market value may be higher or lower than the cost to rebuild your home. With replacement cost coverage, you can rebuild your home on the same lot at current local construction costs if it is destroyed.

Companies use various methods to determine the estimated replacement cost of your home. Be prepared to answer questions about your home’s square footage, number of bedrooms, and number of bathrooms. Inform your insurance agent of any custom features that are part of the dwelling.


When considering replacement cost coverage, be sure to deduct the value of the land, foundations that are below the surface of the ground, and other items such as landscaping and lawn sprinkler systems. If a loss does occur, the insurance will cover the cost to replace the actual structures on your property.


Household contents are only covered for their actual cash value. Actual cash value is the replacement cost minus depreciation. You can buy replacement cost coverage for your possessions as a policy add-on, or endorsement. A homeowner’s policy also offers very limited coverage for valuables like jewelry, furs, cash, and stamp or coin collections. You can buy separate endorsements to cover these items, but doing so will significantly increase your premium. You may also be required to have such items professionally appraised, at your expense.

Be sure to review your policy on an annual basis. If you make major improvements or additions to your home, you’ll want to contact your insurance carrier to arrange additional coverage.

Closing on Your Loan and Good Faith Estimate

Within three days of receiving your completed mortgage loan application, your mortgage lender is required by federal law to provide you with a Good Faith Estimate of the fees and other costs associated with the mortgage loan. These costs, known as Settlement Costs, cover every expense associated with your transaction. Items such as inspections, title insurance, taxes, credit report, etc., will all be disclosed to you in writing. Closing costs can vary, but usually range anywhere from 3 to 5 percent of the sales price. Make sure you understand and agree to any costs disclosed to you. Always ask questions if a fee seems unnecessary or excessive.

In addition to your down payment, which is your investment in the house, you will be required to pay certain closing costs on the transaction. Click here to find a list and explaination of these costs:


Step 8 - Becoming A Homeowner

Congratulations! Now that you have closed on your home, you are officially a homeowner. But the hard work does not stop here. As a homeowner, you will have a new set of responsibilities and costs that are important to prepare for:

  • Moving Expenses: These include renting a van or truck, plus packing material, etc. You can negotiate the best price of a rental by calling different companies. You should retain all receipts related to your moving expenses, as they may be tax deductible. Be sure to check with a qualified tax advisor for details.
  • Utility Connection: Gas, electric, water, and telephone services all require hook-up fees in addition to any actual deposits required. You may have to pay a deposit if you have never had a utility account in your name, or if you’re moving from another city or state. If you are currently paying utilities, but the account is in someone else’s name, (landlord, parents, etc.) you should inquire as to whether your name can be added to the account. This may allow you to avoid additional deposits by establishing yourself with the utility provider prior to moving. For example, if you are living with your parents, and everything is under their name, you can request that your name be added to the utility bill. Both names should then show up on the bill. Each utility company has its own requirements, and in some cases, there’s no way around a deposit requirement.
  • Appliances: Your purchase agreement will clearly spell out which, if any, of the major appliances will be transferred with the home. Make sure that you’re prepared to buy whatever you’ll need to establish your new household. You won’t want to wait until moving day to find out you don’t have a refrigerator!
  • Furnishings: Typically, homes do not come furnished. You may be able to negotiate curtains, blinds, etc. as part of the sale, but any such agreement must be made a part of the purchase agreement. It’s a good idea to wait until after the closing to purchase any furnishings for your new home.
  • Landscaping: Depending on whether you buy a new or existing home, landscaping can be another costly item. Make certain that you have a clear understanding of how much, if any, landscaping is included with your new home. Because landscaping is not usually considered an immediate necessity, you can wait until after closing to address the issue. However, you should keep in mind that part of being a good neighbor is keeping your front landscaping attractive and neat. Also, check to see if your area has covenants regarding landscaping requirements.
  • Maintenance and Repairs: Your pre-purchase inspection report should have given you an idea of what, if any, repairs might be needed once you move in. It is a good idea to keep a separate household account to be used for maintenance costs and repairs. Even if your home doesn’t require any immediate repairs, it will at some point. At the very least, you should always set aside enough money to cover the deductible on your hazard insurance in the event of robbery or fire.
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