Dallas Home Appraisals News and Information

Yesterday we discussed the true cost of getting a loan, today we'll talk about the costs of owning a home beyond your mortgage payment.  The first two questions most buyers ask are how much can I qualify for and what will my monthly payment be? The question is not what will my mortgage payment be, but what will owning this home cost me. 

Beyond your monthly mortgage payment, you must also build in property taxes (1/12 of your annual assessment), property insurance and PMI (same formula; you'll likely pay PMI if you put down less than 20%).  Many times buyers will find they can afford the house but not the taxes.  If that's the case, you can't afford the house.

Next, consider the cost of getting into the house.  Does it need any repairs or renovations not covered by the seller?  Do you need to buy your own appliances (generally you will need to buy at least the refrigerator and washer/dryer) and will you need more furniture?  Some of these costs, like furniture, are not immediate and you can budget for them down the road.

Once you are in your new home there are other expenses you might not have incurred as a renter.  Maintenance and repairs are the biggest, but also consider how you will keep your lawn (are you a do-it-yourselfer or will you pay a service) and who will clean your house.  Another biggie is utilities - it costs a lot more to heat and air-condition a 2,500 square foot house than a 1- or 2-bedroom apartment.  If you buy a house with a pool, remember to factor in not only the monthly costs of owning a pool (which could include cleaning, higher electric use, chemicals) but also the costs associated with the life of the pool (replastering, retiling, etc.).

Be absolutely certain that you read both the inspection report and the appraisal so you know exactly what you are getting into.  Some needed repairs might be used in negotiations with the seller, some might be dealbreakers and others might be things you can live with for awhile.  An inspection is not just a formality, it lets you know what condition the house and property are in and what you can expect.  Be sure to also get the opinion of a trusted professional, friend or family member.  Sometimes buyers become so emotionally attached to a find that they cannot let themselves see any negative issues that might come back to haunt them.

There is a good article on Kiplinger that goes into more detail about the true cost of homeownership, and even more online (just google the title phrase).  This post is just intended to get you thinking in the right direction.  And again, don't despair, the point is to gather all the information you need to make the right choice.  Remember, information is power! 

Finally, as we generally end our posts, contact us at Blue Star Appraisals if you have questions, need more information, or want a referral to one of the trusted brokers or lenders that we work with.  If you are reading this then you are a potential client, and our interest is in providing our clients with all of the information they need, coupled of course with excellent service, to make the right decision.  We don't want to just do your first appraisal, we want to be your source anytime you are making a change which requires you to know the market value of your home, or anytime you are in a position to make a recommendation to family and friends!