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Questions to Ask Before Buying a Home

Buying a home used to be a top priority for many Americans, but in recent years, that seems to have changed. The recent collapse of the housing market made one thing clear, it's that home ownership is not for everyone. It's a significant, long-term commitment that requires strong financial standing and the right timing. If you are still interested in the idea of buying a home in St. Louis, but not quite sure, then there are some questions you need to mull over in your decision making process.


What's the purpose of the home? What do you want to do with it? Are you going to live in it? Are you going to rent it? Figuring out what your exact plans are for the purchase is crucial because it will help you determine the loan you need and also the kind of property you need to purchase.

Realistic budget?

Before you even think about whether you want a two- or three- bedroom, you need to figure out what you can actually afford. That means taking an inventory of your income, expenses, assets, savings, and debts. Is it reasonable for us to buy a $500,000 home or a $200,000 home?

Hidden costs?

The mortgage and down payment aren't the only numbers you need to consider. Costs like property taxes, home owner's insurance, realtor fees, closing fees, utilities, and maintenance can really add up. Some areas have hazard insurance due to natural disasters that are prone to the area, like hurricanes in the Southern US and earthquakes in California.

Loan options?

Just like applying for a credit card, whether you qualify for a particular home loan depends on your financial history. Lenders will look at your pay stubs, employment forms, and tax returns going back two years, as well as your credit score to determine eligibility. The more you can put down, the better, because it will reduce your payments over the term of your mortgage.

Future plans?

While you might be financially ready to buy a home, it might not make sense given your current career path or relationship.  Is there any chance you'll be transferred to another office? Are you or your partner, if you're looking with someone else, considering grad school in the near future? One of your most expensive assets that you're ever going to invest in in your entire life, besides your retirement, is your home.

Moving soon?

If there's a good possibility you might move within five years, now is probably not a good time to buy. When you consider the mortgage itself factored with all the costs of closing the house and then selling it again, it ends up being cheaper for you to stay renting for this same time period if you're going to be moving any time under five years.