Everything You Need to Know About Buying Your First Home


From mortgages to closing costs, here's how to prepare.

Buying Your First Home Couple With Tablet
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You've been thinking about it for a while and have decided that you want to take the plunge — into buying your first home, that is.

That likely means you've been saving for a down payment; are willing to be your own landlord (that leaky faucet will now be your problem, after all); and want to stay in your next place for at least five years, the amount of time it typically takes to recoup the upfront costs of buying a home.

So what now?

First and foremost: Get a really clear idea on what it means to become a homeowner. You're about to take on a lot of financial responsibility, and falling in love with a property that's a stretch — or totally out of reach — for your budget is no way to start. Here are some key things to understand about the homebuying process before you commit to your new home.

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BUYING YOUR FIRST HOME IS
MORE THAN A MORTGAGE

Your mortgage payment covers principal and interest on your home loan, but it's actually
just one facet of the big picture. There are a number of other costs to consider:

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    HOMEOWNERS INSURANCE

    Premiums can range from $300 to $1,000 annually. For a rough estimate, divide the value of your home by $1,000 and multiply by $3.50.

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    Property Taxes

    Median property taxes range from 0.18 percent to 1.89 percent of the home's assessed value and are determined at both your county and state level, so be sure to check your county and state's tax rates.