8 Things to Know Before Buying a House | Molly's Money


  1. Hi Molly! I’m new to your blog today, and I’ve read almost everything. Anyways, I do have a question- do you know when the appropriate time to work with a realtor? My husband and I are looking to buy in 2015. Any thoughts?

    1. Do you mean 20% down? Is that what you’re referring to? The 20% down is just the down payment on the mortgage to avoid having to pay PMI. I’m not including taxes or anything like that… just the mortgage.

      1. No. Sorry, you referred to it as 1/4. Not having a mortgage that totalled more than 1/4 of your net monthly income. I was wondering if that includes taxes, pmi and home owners insurance. We currently live well below our means as i bought this house by myself. Now we have two incomes, planning a wedding and a family (someday). We wanted to buy a house in a few years when we have a sizeable down payment, but with all this hype about interest rates going up we are considering doing it now instead. Most of the online calculators say we can afford much more than i think we can.

        1. ohhhh i see what you’re asking now! sorry for the confusion!! i would say yes to factor in all of those things into the 25% of your income. and yeah – those online calculators tend to over estimate what you can afford. the rise of interest rates is one of the reasons my husband and i are considering moving now.

  2. Great tips for first time home buyers and good reminders for anyone who hasn’t moved in many years working with good professionals throughout the process will reduce stress during what can be a stressful time. Rely on those with experience to guide you through.

  3. Save as much as you can for the downpayment so that you can have a more affordable mortgage. While it is tempting to buy that big house, consider the cost to maintain it. Buy the house your can afford.

  4. Having owned 3 houses and 2 as a single parent and gutting one for renovations I offer the following;

    1. the $80 000 house you are looking at is actually $160 000. Is it worth it? How do I get this number. Add the interest of the loan to the principal.
    2. Make you first monthly payment the day you take your loan. It will save you 7.5 years of interest. Yes this is a fact. You are boring $80 000 for 30 days if you wait one month to make a payment.
    3. Make 13 monthly payments over a 12 month period. Diving the 13 payments by 12 makes it manageable and all the 13th payment goes to principal.
    4. Every time you get paid pay your mortage. For example when you get paid twice a month divide your monthly mortgage in half and pay half each pay period. Why? Because again, you are reducing the principal each time you make a payment. Why pay interest on your principal amount when you don’t have to?
    5. Disipline yourself to pay an extra $20 each time you make a payment. As time goes by increase it by $5 as often as you can.
    Why do I say this from experience. I owe one house clear and will pay for the second house in 6 years and own 2 houses clear title when I am 56. Discipline is everything. When you lose your job you can return to the original loan amount and feel like you are actually ahead. When I sold my first house I was 7.5 years ahead on my mortgage so I had enough money after paying off a significantly smaller principal to pay for the second house cash. Invest sweat equity. You will be amazed what you can do yourself. Be patient with yourself. Practice makes perfect. I have since remarried and we are truly blessed.

    1. GREAT tips to add to this article. I’m 27 and treat my car payment this way. I’m “shopping” for a house currently, and will apply the same principles to my new home! Thanks!

  5. Good points but I have to say that having 20% downpayment and mortgage being 1/4 of income is a good rule of thumb but not always applicable/harder to achieve in higher cost of living cities.

  6. Having owned a home (well, paying the bank to live in my home) for almost 10 years, I’d echo all above but add something to the beginning. You don’t HAVE to buy a home. Renting isn’t bad.

    I’m single and really hate the responsibility of homeownership all on my own. It causes a lot of anxiety. Every noise sets me on edge wondering how much it will cost and who can I trust. There are many days I considering selling my home and renting again – but that wouldn’t be wise financially.

    I’m on my second home and the bathroom will be gutted next week. I’m excited for the end result but so scared for the process and what MIGHT go wrong. Those are the times I just want to call a landlord.

    Yes, don’t rush and a good realtor is gold. I’ve had two and the second showed me what a good realtor does and who they are and I’ll never do it without a good one ever again.

  7. Great post!

    The only thing I would add is if you are buying a condo or townhouse, read the minutes of the potential HOA like a hawk. Our first place, a townhouse, the HOA had no money in reserves and needed to make repairs. In the FIRST YEAR we were slapped with $9k in “emergency” repair bills. It sucked.

  8. Great post! I wish we had known to pay attention more to location than just the house itself. We should have considered resale or rental potential, but as first-time buyers all we wanted was the ‘perfect’ house and yard. We didn’t even pay attention to the brand-new construction 2 blocks away. As a result, we got beaten out by new construction that was selling for lots cheaper and it totally killed the value of our home!

  9. This series is so interesting and helpful, Molly. I think you are the sweetest, most down to earth blogger and your posts about real life issues show that you care about helping people from your own experiences.

  10. Great post Molly! We bought our house a little over two years ago and I totally agree with all of your tips. Definitely having a great home inspector is key! You don’t want to spend all this money on a home and later find out this and that are broken and need to spend more money on it.

    xo, Yi-chia
    Always Maylee

  11. We have bought 5 houses and have bought from a FSBO and then sold on our own. It is about being educated. Also it is important for first time home buyers to consider added expenses such as mowers, rakes, shovels, landscaping expenses and then the occasional water heater going out etc. We have seen home owners be house poor and also not keep up their property. I feel this is rude. The staining of a deck and mowing a yard is part of being a home owner. If you do not want to take the time to do these things, stay in an apartment. Also if one has a dog, a fence can be necessary and making sure they do not bark a lot. Good post Molly!

  12. Yes! This is a great post, Molly! We are actually in the process of buying a home (we close next Wednesday!) and it is quite overwhelming if you don’t know what you’re doing. Thankfully I went to Real Estate school and have some experience, as well as we have an amazing Realtor… I totally agree with your “1/4 of your income” advice! One big thing to note is that lenders will always quote you on a mortgage for MUCH higher than you should be spending. Our lender said we could get approved for a lot higher than we thought we could afford, but that made our monthly payment skyrocket and we just didn’t want to do that! So we opted for looking at a price range that was based solely on how much our monthly payment would be.

    All of these tips are so great. Thanks for sharing and good luck as you start the process of buying a bigger home!!

  13. Thank you for posting this, Molly! I probably made over half the mistakes you described in this post. We were in a hurry to find a home shortly before getting married. In hindsight, we should have eaten the high costs of renting for a short period of time and then took our time with the home-buying process. I let the cost of rent scare me and I shouldn’t have done that. I’m also not sure we did a good job with #1 and #2.

    Our home inspector wasn’t very good at all. They didn’t catch all sorts of things which ended up costing us big time. Serious things like water damage were missed. Now I have to figure out how to fix a leaking roof without going into debt. I hope it will be a minor job and something I can do myself.

    I’ll spare you the whole story, but it’s just turned into a big, expensive mess. We’re praying that we’ll be able to sell it and move on. That’s what we’re fixing to do. The good news is that it’s dual-zoned (residential and commercial), so maybe some business would buy our place, fix it up, and use it accordingly. That happened to one of the properties across the street from us.

    Anyway, I don’t think I can add anything to your list here. I think you did a great job covering the major areas of concern. I wish I could say that our first home-buying experience was a good one, but I also know that there’s a purpose behind this ordeal and that God works all things for the good of His people (Rom. 8:28). I’m glad that we can use your valuable advice here once we get to that point of buying our next home! 🙂

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