How to Know What You Can Afford When Buying in Rochester

Rochester Minnesota Real Estate Podcast with Andy Mulholland

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Buying a property goes well beyond the final purchase price. Just because you see a price online, or a lender gives you an idea of your potential payment, doesn't mean they've factored in all the costs involved.

There are certain upfront costs involved in purchasing a home, such as a home inspection, the cost of a potential appraisal, the earnest money you'll have to put down as part of your down payment, and the closing costs. Many of these things can be worked into the purchase by negotiating with the seller.

When you go to factor your payment, there are some things you want to consider:

• Property taxes. When a lender says you're approved for a $160,000 mortgage, what does that mean? Often times they don't include the taxes you'll have to pay.
• Insurance. This can vary depending on factors like whether your home is on a floodplain or whether you have a wood-burning fireplace. There are a handful of things that need to be looked at to determine your insurance costs.
• Utilities. Many buyers fail to factor in what the utility costs might be. When we work with a buyer, we look at the property and find out what the average utility costs are per month.

When buying, you need to keep these three things in mind to avoid overextending yourself financially.

If you have any questions about how to make informed decisions when buying, please don't hesitate to reach out to us. We're always available to help with your real estate needs.