Houses located in emerging or progressive areas under development could yield a rewarding financial return. These houses could also yield social rewards. During the early years of development, you might have to endure construction sites and noise. Several months or a year or two might pass before houses in the community fill with neighbors, people who may quickly become among your closest friends.

Hidden costs of buying a house

A place to call your own, great neighbors and a community that is growing and increasing your house’s value can make buying a house a solid financial and personal decision. To truly be advantageous, you need to know everything that you’re taking on when you buy a house.

The principal is the largest part of your mortgage. It’s also the part of owning a house that you might pay the most attention to. What you don’t want to do is make the mortgage principal the only part of the owning a house that you focus on. In addition to the principal, when you buy a house, you will likely have to pay expenses like those listed below:

  • Loan interest – Mortgages with adjustable rate interest can start low, but may not stay that way. A variable rate mortgage and a tracker mortgage are other types of mortgages that could increase should interest rates hike. A fixed rate might be higher, depending on when you buy a house, but a fixed rate mortgage could keep your monthly output steady.
  • Closing costs – Items included in closing costs are the first month’s homeowners association fees, prepaid interest and points.The more points that you pay upfront, the more you could lower your monthly mortgage installments.
  • Mortgage insurance – Depending on the lender,you may have to pay mortgage insurance that covers 10% or more of your total mortgage. A way around the insurance or a way to lower the insurance is to invest more in your down payment.
  • Homeowners insurance – Mortgage insurance and homeowners insurance are different. Mortgage insurance protects the lender.Homeowners insurance protects you and the lender.
  • Homeowners association fees – Although homeowners association fees might be included in your closing costs, you will generally have to make these payments monthly. Don’t overlook homeowners association fees and rules when you start looking for a house.
  • Property taxes – The value of your property, the age of your home and the jurisdiction that your house is located in impact property taxes.
  • Mortgage broker or realtor fees and commissions – These fees are higher in some parts of the country.
  • Home inspection – Factor in the costs of getting a thorough home inspection.
  • Home appraisal – You’ll also need to get your house appraised to realize the actual value of the property.

Because there are additional costs that you must generally be responsible for after you buy a house, shop for property that you can easily afford. In other words, don’t buy a house that leaves you with only $100 or less left each month after you pay your mortgage. After all, there are other costs involved in owning a house that you will surface during and after closing.

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The real estate market is filled with many high-quality residences, and after a comprehensive search, you’ve found a residence that fits your personal needs and budget perfectly. However, you may need to think twice before you submit an offer on this residence.

There are many factors that homebuyers should consider before they make an offer on a house, including:

1. Neighborhood

Ideally, you’ll want to find a home in a community filled with friendly neighbors. But in many cases, homebuyers may focus exclusively on a residence and ignore the neighborhood entirely.

Taking a walk around a neighborhood often allows you to get a better feel about what it is like to live in a neighborhood and may give you a chance to meet some of the neighbors as well. Also, a simple walk around the block will provide you with a better idea about whether a house’s value may rise or fall in the foreseeable future.

For instance, a neighborhood filled with houses with well-maintained front lawns, nearby parks and schools and other local amenities may prosper for years to come, and home values may rise in this neighborhood over the next few years.

2. Crime

No one wants to live in an unsafe area, and you can learn about crime near a prospective home before you submit an offer on a residence.

Contacting a local police station usually is a great idea for homebuyers who want to find out about crime statistics in a particular area.

Furthermore, your real estate agent can provide insights into crime in a specific area and help you determine whether a particular house is the best option.

3. Traffic

Although your dream home features all of the amenities you want, it might fail to provide you with quick, easy access to your office day after day.

For example, traffic can be a problem if your house is located in or near a major city. And if you need to travel to work every day, it is important to understand how traffic could affect your daily commute.

To better understand traffic patterns in a particular area, try driving to a residence at different times during the day. By doing so, you can learn about traffic patterns near a house and be better equipped to make a more informed decision about whether to submit an offer on a residence.

4. Taxes

You’ve been pre-approved for a mortgage and have established a monthly budget for a new home, but taxes may vary depending on where you move. Thus, you’ll want to learn as much as possible about potential taxes that you could face at a new residence before you submit an offer.

Taxes may add up quickly, but homebuyers who budget accordingly can minimize the risk that they’ll fall behind on tax bills. And with support from your real estate agent, you can learn about taxes that you may encounter if you purchase a particular residence.

If you’re fully satisfied with a residence after you consider the aforementioned factors, you’ll be ready to submit an offer and move one step closer to moving into your dream house.

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