The decision about whether to buy a first home is complex. Consider your finances, how well you understand the process, even the stability of your romantic life. Here are some things you should know. Washington Post It takes money
Besides the down payment, home buyers can expect to pay thousands of dollars in closing costs. There are also significant costs associated with selling, so financial planners generally advise people to avoid buying if they don't plan to stay for a while. Karen P. Schaeffer, a financial planner in Rockville, Md., said she advises clients not to buy unless they see themselves in the house for at least five years. "If your job isn't settled, please don't buy," she said. "I don't want you to lose a job opportunity" over a house.
Don't get too creative
It shouldn't take an exotic mortgage to pay for your home, Schaeffer said. "I'm a really huge fan of fairly conventional financing," especially after seeing how so many people got into trouble with other types of loans in the past few years. A buyer considering alternative loan, such as one with interest-only payment or adjustable rate, should "try out the worst-case scenario" and see if the budget can handle it, she said.
As would be-buyers prepare a budget, they shouldn't neglect the other expenses often associated with moving, such as new window treatments and furniture, Schaeffer said. Extra cash is needed for furnishings if you are buying a place significantly bigger than where you live now. Andi Fleming, a Washington, D.C., real estate agent says she advises first-time home buyers who are dreaming of big renovations to be especially cautious. "The cost can be extraordinary." Even regular maintenance can add up. Preparing to buy
Schaeffer suggests that prospective home buyers draw up an estimate of what their budget will be after they buy and then follow it for six to 12 months. "It's an easy way to prove to them that they are not quite ready — or get them motivated." Another key factor: the ability to save. "People have to be serious enough about it to collect a down payment first," Schaeffer said.
How much would-be buyers need to save depends in part on how reliable their income is. Even with a stable job, there are no guarantees in life. Schaeffer said people should ask themselves how long they can go without a paycheck should they lose their job or get seriously ill. "You ought to be able to go three to six months," she said. But would-be buyers shouldn't limit their analysis to the cost of owning the home, but should also make sure ownership won't prevent them from meeting other financial goals, such as buying a car or saving for college and retirement.
In the meantime
While they're saving their money, would-be buyers can research the loan application and home buying processes. There are countless resources to explain how they work, including books, Web sites and free and low-cost seminars. Check the Times' Homes section on Saturdays for a list of classes for first-time home buyers. These programs can help buyers better understand mortgage terms, budgeting and the roles of all the players involved in a typical real estate transaction