You thought you only had to worry about getting approved for your mortgage…
As a homeowner, you will find that there are expenses that you plan for and expenses that hit you like a ton of bricks! You can budget for changing wall colors, ripping up old rugs, stripping cabinets and changing light fixtures. However, replacing the sewer line from the street to your home is an expense you would never dream of, but it can happen! No home inspection can catch everything. Water heaters and appliances don’t last forever, and a home inspector can point out potential trouble areas, but no one can tell the future. In the event of an unwelcome surprise, you need to be prepared!
Mortgage lenders think about these surprises. Believe it or not, they want you to be able to afford the property you are purchasing and still have an emergency fund for any repairs that might be needed down the road.
“We don’t want our borrowers to qualify for a loan using every single last dime they have, and not have anything left should they run into an emergency. The current government shut down has shown the importance of having an emergency fund in place. It has also highlighted the fact that a huge percentage of the population does not have such a fund in place. Sometimes, due to their excitement at the prospect of owning a new home, borrowers don’t look at the impact it could have on their lifestyle. We try to educate them to look at the big picture, but in the end if they qualify and want to move forward it is their decision,” said Sean Riley CEO of Mortgage Equity Partners.
Some of the biggest surprises’ borrowers have after the purchase:
- Condo Buyers and Special Assessments-your condo might be perfect with no problems that you can see, but the common areas are a shared expense. Be sure to check out all common areas because you are required to contribute to the maintenance of the entire project.
- Unexpected small items that add up- a couple of windows, new locks, washer and dryer, light bulbs, storage expenses, area rugs, floor mats, shower curtains, new doorbell, bath mats…you get it?
- Unexpected big items that could break the bank-hot water heater, HVAC systems, plumbing, roof repairs, garage door repairs, gutters, maintaining and repairing a deck.
- Storm damage and damage to neighbors’ property -if a tree goes down in your yard but falls on the neighbors’ fence it is your responsibility!
- Ongoing maintenance and seasonal expenses-landscaping, shoveling, window washing, painting. In New England, when it is 10 degrees for 10 days you will be hit with a larger than usual heating bill, and conversely when it is over 100 degrees all summer in Florida be ready for the electric bill to be sky high!
Maintaining a home is a never-ending job. All in all, most people agree that it is all worth it when you find your dream home, but you need to be realistic about expenses. When purchasing a house you must be able to afford the mortgage payment as well as the maintenance of the property and repairs should the need arise.
For a complete picture of your financial readiness to purchase a home you should always work with a professional loan officer. At MEP, we offer big bank luxuries with the feel of a small bank with personalized service. 877-866-4511 for a consultation.