How to Financially Prepare to Buy a Home

Kansas City

Are you financially prepared to own a home?

Notice we didn't ask whether you can qualify for a mortgage.

There's a difference between qualifying for a home loan and being financially comfortable as a homeowner.

At The Brown Team at Sage Door Realty, we want our buyers to think beyond getting to the closing table. We want you to be comfortable with the home - and the payment -after you get the keys.

Here are a few things to consider before beginning your home search.

1. Know Your Budget Before You Start Looking

One of the best things you can do before shopping for a home is establish a realistic monthly housing budget.

Your mortgage payment is only part of the equation.

Depending on the property and your financing, your monthly expenses could include:

• Principal and interest
• Property taxes
• Homeowners insurance
• HOA dues
• Utilities
• Routine maintenance and repairs

Your lender may tell you how much you qualify to borrow, but that doesn't necessarily mean you should spend that much.

Think about the rest of your life, too. Do you enjoy traveling? Eating out? Hobbies? Saving for retirement? Do you have car payments, student loans, childcare expenses or other financial priorities?

The goal shouldn't simply be to buy the most expensive house you can qualify for. The goal is to buy a home that fits your life.

2. Don't Forget the Costs That Come After Closing

When you've been renting, it's easy to forget how many expenses a property owner handles behind the scenes.

When something breaks in a rental, you typically call the landlord.

When you own the house, you're the landlord.

That means the leaking faucet, broken appliance, HVAC maintenance, lawn care and unexpected repairs become your responsibility.

That's why having money left over after purchasing your home is important.

You don't want to put every dollar you have into the purchase and then have nothing available when an unexpected expense comes along.

3. You Don't Have to Do Everything to the House Immediately

This is a big one.

You find a home you love, get the keys and suddenly start thinking:

We need new flooring.

Let's paint everything.

We should replace those countertops.

I'd love a new deck.

And before long, you've created another huge list of expenses.

Remember: you don't have to make every improvement on day one.

Live in the home for a while. Learn what you like and what you don't. Prioritize the projects that actually need attention and save for the others.

Your house doesn't have to become your dream home overnight.

You can make repairs, additions and improvements over time and as your budget allows.

4. Consider What Happens If Your Household Income Changes

For households with two incomes, here's an interesting question to consider:

Could you comfortably make your housing payment if you temporarily had to rely on one income?

That won't be realistic for every household or every housing market, but it's worth discussing.

Jobs change. Families grow. Unexpected expenses happen.

Leaving some breathing room in your monthly budget can provide flexibility when life doesn't go exactly according to plan.

You don't necessarily want a house payment that requires everything to go perfectly every single month.

5. Be Financially Prepared Before You Find “The One”

There's another reason to get your finances in order early: the right house may not wait for you.

Imagine finding a home that checks nearly every box.

You love the location. The layout works. The price makes sense.

But you haven't talked with a lender yet, you're not sure what loan program you're using, and you don't have a preapproval.

Now you're trying to figure everything out while another buyer may already be preparing an offer.

It's much better to do that work before you find the house.

Talk with a lender. Understand your financing options. Establish your budget. Know approximately how much cash you'll need for the transaction.

Then, when the right opportunity comes along, you can make decisions with much more confidence.

Being Prepared Doesn't Mean Being Perfect

You don't need a perfect financial situation to become a homeowner.

You need to understand your situation.

That's why we encourage buyers to start asking questions early - even if you don't think you'll purchase for several months.

Sometimes that conversation reveals that you're ready now.

Other times, it gives you a roadmap for what you need to work on first.

Either outcome is valuable.

Thinking About Buying a Home in the Kansas City Area?

If you're considering buying your first home - or it's simply been a long time since you've gone through the process - The Brown Team at Sage Door Realty would be happy to help you get started.

We work with buyers throughout Blue Springs, Lee's Summit, Independence, Grain Valley and the greater Kansas City area, and we'd rather have you ask questions early than feel rushed later.

We also offer our free monthly First-Time Homebuyer Class on the second Tuesday of every month at 6:30 PM. And despite the name, you don't actually have to be a first-time buyer. If it's been several years since you've purchased a home and you'd like a refresher, you're welcome too.

Steve Brown
The Brown Team | Sage Door Realty