Being a smart home buyer is much like being a smart car buyer, the best tool you can have is being equipped with the right knowledge. Doing complete and thorough research will help ensure you make the best decision possible.  After you have found the perfect house or narrowed it down to multiple houses you are interested in it would be wise to sit down and carefully look over the financials in many different aspects.

The price of the home is just the start.  If you have ever gone through the process of being preapproved for a home loan you know that typically you are approved for a lot more money than you actually want or need.  In this case you need to set your own personal budget for your new home, some recommend this should be a third of your take home pay on a 15 year FIXED rate mortgage.  This would be combined income and could vary depending on your personal debt like cars, student loans or credit cards.  This may seem like it is much less then you thought you could afford but there are many additional expenses that come along with being a home owner.

One big expense that most people overlook if it is their first time buying a home is buying furniture and other standard household items. Many people are used to living in apartments, condos or even mom and dads and in these cases many don’t have enough furniture to even fill the place; this may not seem important at first but depending on the individuals circumstances using bean bag chairs for living room furniture or TV trays for the kitchen table gets old very quickly.  These items tend to sneak up on most and end up being a burden that turn into more debt and more cost that is overlooked.

Some more expenses to consider are additional taxes, HOA fees, mortgage insurance and home insurance.  The fees that are tacked on during the purchase, known as closing cost, can vary depending on the type of purchase. The closing cost can typically be calculated fairly easily and fortunately is a onetime cost; on the other hand taxes and HOA fees are ongoing and should be carefully included into the consideration when purchasing a place.  Many times there are HOA fees that can be several hundred dollars a month, this money could be better used elsewhere so it is important to educate yourself on these additional expenses before you close on a new house.

It is said that knowledge is power, this is especially true when buying your home. It is important to have a full understanding of all the hidden costs, what your limitations are and how comfortable you want to live.  The best thing you can do is take your time, do your research and be honest with yourself and your situation.

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