Buying Your First Home: 5 Ways Your Finances will be Affected

Even though you’ve never owned a home before, you surely know that the endeavor will be an expensive one. It will be the largest and the most important investment you will ever make. 

Before you make the commitment, you should really sit down to determine exactly how your financial situation is going to change after you procure the mortgage. This will help you to understand what kind of home loan you should be going after and how you will be able to afford monthly payments on your home. 

It should also give you an idea of how to prepare for those unexpected expenses that comes with buying a home. This is especially true if you are buying a home for the first time.

Monthly Home Payments

People who have home loans generally find that the largest chunk of their paychecks goes to that expense. Your mortgage payments are going to be based on the total purchase price of the house minus the down payment that you made. 

Keep in mind that you will also have interest on the loan. In addition to the principal and interest, you will also likely need to pay for taxes and home insurance on a monthly basis.

Additional Purchasing Costs

Financial firms will remind you that the costs involved with buying a house are more than just the down payment and the mortgage. You will need to pay closing costs and a fee to the lawyer. 




Also, you may need to make some renovations to the house before you can move in and procure permits for some of these renovations. The house may pose safety concerns that need to be addressed before you can live there.

Regular Bills

In order to keep your home comfortable and inviting, you’ll need to pay for heating, cooling, electric and water. Some of these bills you can keep down yourself by controlling the temperature in the house and turning off the water and lights when they aren’t in use. 

You may need to do some greater shopping around though as you’re comparing the costs of larger decisions, such as the choice between gas and electric heating. When you’re assessing costs, remember to take both long-term and short-term savings into consideration.

On Your Own

If you are moving out of your parents’ house for the first time, you might not realize how many little costs you’ll have on a day-to-day basis. You won’t be able to open up their refrigerator and take food whenever you want; you’ll need to make sure that the bathroom is stocked with toilet paper and that the laundry room always has detergent. 

These bills are sometimes the most shocking to new homeowners because they forget to factor these elements in when making their budgets.

Recreational Spending

You are likely to see a dip in the amount of money that you can use for recreational spending or discretionary spending, especially if you have never lived on your own before. 

During the first few months in particular, make sure you are careful with how much money you spend. You want to make certain that you are able to put aside enough money in the event that you were to lose your job or if the house need unexpected repairs. 

Remember that houses do require work, and this work requires money.

Owning a home is a great responsibility, and doing so will affect you in many ways. Knowing how your financial situation will help you be prepared to take on your mortgage and all of the other unexpected expenses that come with homeownership.

4 Financial Resources for Families Looking for a New Home

Higher home prices and the decreasing number of homes available for sale aren’t the only things keeping most families in city apartments. Most of these families, regardless of their income levels remain hooked up in rentals as they don’t know how to source for funds to buy a home. 

Here are four possible financial sources for families seeking to buy their family home.

State Down-Payment Grant

Where do you live and what is your average annual income? Those are the only questions most state, county or even state governments ask in determining whether you qualify for down payment assistance. 

To make homes affordable to all citizens, state and county governments set up the little-known down Payment Assistance Scheme. This helps low income earners raise the down payment required by most mortgage providers.

College Graduation Grant

A Bachelor’s degree in any related field can also earn you a significant grant amount that you can use as a down payment for a family home, in Indianan and Ohio at least. 

In these two localities, you qualify for up to 2.5% of your home purchase if you graduated with a bachelor’s degree here within the last two years and have a full-time job.

Mortgage Loan

Mortgages by far remain the most popular financial resources to purchasing a family home. With a stable source of income and the required down payment, you can approach any financial institution offering mortgage services for financing. 

Note that the higher your down payment you raise and shorter the repayment period, the more favorable the mortgage repayment terms.

Through Low down Payment Loans

Though they suffered a major setback in the recent housing crisis, low down payment loans are still available. For instance, the Federal Housing Authority only requires that put down as little as 3.5% of your home purchase price.

Good Neighbor Next Door

Is your career centered on community services like emergency medical technician, firefighter, an active law enforcement officer or even a veteran? That too can increase your chances of owning a family home. 

Through the Good Neighbor Next Door program, the U.S. Department of Housing and Urban Development can finance up to 50% of the home’s listing price if you seek to buy a house in regions that the institution considers revitalization areas. 

There is a catch though. You must work full-time in the designated occupation and agree to live in the home for not less three years after purchase.

Bottom Line

Real estate experts believe the only reason hindering could-be homeowners from owning a home is the fact that they aren’t familiar with the different finance resources available to them. 

If you dream of moving your family out of a rental into a decent home, research on the various financial sources available to you based on your profession, income levels, and residence.

How Your Family Can Become a Part of the 35% of People Who Own Their Home

According to the Federal Reserve, approximately 65.2 percent of families owned their own home in 2013. If you and your family are currently renting a home, you may be wondering what you can to do join the majority of families by buying your first home. 

The home buying process can seem intimidating and challenging if you have never been through this experience before. However, you simply need the right strategy to turn your goal into a reality. These tips can help you to position yourself for success with your goal.

Start Looking at Homes

Some people think that they should not start looking at homes until they are ready to move forward with their home buying plans, but this is not the case. 

When you start looking at homes now, you can learn more about the market so that you can better determine how much money you need to save as a down payment and what a reasonable sales price is. 

You can also define what you need and want in a home through your search efforts. Some people even find that they become more motivated to save for a down payment by dreaming about the possibilities. 

To begin learning more about the real estate market, search for listings in different communities in your area online. You can also tour homes in new construction areas, such as homes for sale in Davis County, Utah, in your free time.

Talk to a Mortgage Broker

You may not be ready to get pre-qualified for a home loan right now, but you can benefit from speaking with a mortgage broker. A mortgage broker can tell you more about interest rates, down payment requirements, credit score requirements and more for different loan programs. 

You may need to take several months or longer to improve your credit rating and save for the down payment, and your conversation with a mortgage broker can help you to develop reasonable goals in these areas. By setting and achieving these goals, you can qualify for the financing you need to buy your first home.

Save for a Down Payment and Closing Costs

Closing costs for a home loan may be as high as two to three percent of the sales price in many cases. In addition to paying for closing costs, you also may need to make a sizable down payment. 

Some loan programs are available for a five percent down payment or less. However, many home buyers prefer to make a larger down payment so that they have equity in their home from day one. 

By learning about sales prices of homes that appeal to you in your local area and about loan programs you could qualify for, you can determine how much money you need to save. You can also adjust your budget so that you can meet your savings goals.

Improve Your Budget

In order to afford a mortgage payment each month, you may need to make adjustments to your budget. For example, you may need to pay off a few credit cards or refinance your car loan. 

These efforts may also help you to improve your credit score so that you qualify for better loan terms. In the months leading up to your purchase, pay close attention to your budget so that you improve your family’s financial health.

If you have never purchased a home before, the thought of owning a home can seem like a distant and even unattainable dream. However, many people are currently enjoying the benefits of being a homeowner, and there is no reason why you cannot join their ranks. 

By following these tips today, you can more easily position yourself to buy a home within the next few months or years.

When is the Right Time to Buy a House?

Knowing when the right time can be to buy a house can depend on a number of different factors; you need to be aware of changes in the UK property market, as well as of the availability of different mortgages. At the same time, it’s crucial to consider your short and long term personal finances, and whether you’ll be able to buy a house and then be able to build up its value over time. There are also some timing issues that need to be worked out when deciding on a house purchase. 


While the UK property market is still not out of recession, the continued resilience of the London market and the capital’s house prices is having a gradual impact on nationwide prices, with London having experienced a 0.7 per cent increase in property prices in February. Other rises in house prices have been down to some fluctuating sales costs, which are going through a period of gradual improvement and stalling - the average price for a house in the UK is around £213,710 which represents a small growth on previous years. 


You should also be aware of the different schemes set up by the Government to help first time and existing house buyers to lower the costs of mortgages and get them onto the property market. The most recent of these schemes is Help to Buy, which will offer house buyers a 20 per cent deposit loan on top of their own 5 per cent contribution - these loans will be interest free for the first five years, and set at a rate of 1.75 per cent thereafter. The Government are similarly offering home buyers a guarantor scheme for mortgages, with banks being encouraged to offer higher value loans. 


When looking for a mortgage, the right time to get one can depend, then, on how cautious or optimistic banks and other lenders are at any given time; the Help to Buy scheme, which follows previous efforts to raise confidence in the property market, should help reduce risk for lenders. However, the mortgage market is still fairly stagnant, with only marginal increases in borrowing, and more repayments made than new loans taken out in February 2013. 


For most people, then, there is no ideal time to buy a house, but rather a climate of caution that needs to be carefully explored; you’ll need to make sure that your personal finances are strong enough to cover at least a 5 per cent deposit, and that you can cover stamp duty, conveyancing and other fees, which can quickly add up. Look ahead to consider whether your wages and savings can cover monthly mortgage payments and any renovation costs. 


You can make things a bit easier on yourself, though, by looking to buy a new property in Winter-time, where prices tend to be a bit lower as demand falls. Speak to estate agents about offers, and look into options where sellers may be unable to wait until the Spring for a potentially higher price. Similarly, watch out for new mortgage deals and interest rate changes for the start of the new financial year from the 6th of April, if you want to see if banks are willing to lend more at reasonable prices. 

Author bio: Liam writes about finance, from estate agents in Ipswich to mortgage rates. He attends regular finance seminars to ensure he stays on top of the industry.