Preparing To Buy A House: What to budget beyond your monthly and down payment

When you are getting ready to buy a home there are a lot of expenses to consider in your budget beyond your monthly mortgage payment and down payment.

In this video I cover a number of different expenses you should know about when getting ready to buy a home.

I want to make sure you have considered all these different expenses so you're comfortable with your budget as a home owner.

ūüéĀ As my gift to you, I'm offering a FREE download of by book Mortgage Peace: HERE

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Video Transcript

The last thing you wanna do is purchase the home of your dreams, to get yourself over your head and be uncomfortable with that decision that you've made. 

Hi, this is Stephanie Weeks and welcome to my channel if you have not been here before, I'm a 17-year veteran loan officer with experience helping thousands and thousands of customers with millions and millions and millions, probably even billions at this point, in dollars of mortgage lending. 

Did you know that every year, yes, every year in the U.S., about 21 million people apply for mortgages, but only around 7 million close? That is a statistic that I am working very hard to change. 

I drop new videos every Tuesday and Saturday. Please be sure to like the channel, subscribe, and don't forget to hit the bell to be notified every time I drop a new video. 

Do you find it overwhelming to prepare for potentially purchasing a home? Don't know where to start, don't know what to expect? In this video today, I'm gonna really go behind the scenes and talk to you about all the other things that happen and that you need to prepare for that most people do not touch on. So let's dive in. 

When you write a contract to purchase a home, that is actually, should be, multiple steps in and not the first step that you take. The first step that you take in preparation to purchase a home is sit down with your budget and set a goal of what type of monthly payment you want. For some people, that might be 800 bucks a month, that might be $4,000 a month, but you want to set your goal based on your budget. Some of the things you do not want to forget about, okay? Let's say that you're renting right now. Well, maybe your rent is $1,000 a month. And if the AC breaks, you just pick up the phone and you call the landlord. But when you own a home, there's no landlord to call. So if that AC breaks, it could really be a big deal. It could be a several thousand dollar repair. The other thing that you don't wanna forget besides preparing your budget and anticipating the monthly payment that makes you comfortable is you wanna prepare for incidentals, such as maintenance and repairs. Let's talk about that a little bit. 

You may have to pay someone to help maintain your yard and your property if you don't have the time or the capability to do that. That is an expense, something again, you typically may not have if you rent from an apartment complex or something like that. Don't forget, sometimes when you rent, it might include utilities. Your house is not gonna include utilities. So don't forget about your internet bill, property maintenance, repairs and upkeep for unexpected expenses. 

I don't know too about home warranties, but my understanding is they could be very, very beneficial to purchase or ask the seller to provide when you purchase a home. That way, if that AC does break, and it's several thousand dollars, I think you have to call the home warranty company first, and then you might only pay $50 or $75, and I think that's good for a year. So I've known of people who actually renew that each and every year, past the first year they live in the home. 

A couple of other things, there are several, okay? But a couple of other things. Maybe you need many blinds, maybe you need curtains when you move in, maybe you need to install an alarm system, maybe you have to purchase that refrigerator, that washer and dryer. Those are pretty common things that you have to purchase when you purchase your first home. You don't wanna forget about budgeting those things. Because if you don't have, I have no idea, let's say $3,000 for a fridge and a washer and dryer, then guess what's gonna happen? You're gonna finance it and that's gonna be a payment. Have you accounted for that? 

Let's take a step back for a second. How about when you're under contract and you're moving forward on the purchase, have you planned on your good faith deposit? Also called earnest money, also called AMD, also called cash deposit. That's where you're giving the seller money in good faith to say, "Hey, I do plan to purchase this home." I've seen that be 500 bucks, I've seen it be nothing, I've seen it be thousands. Have you planned for that? What about a home inspection? Most lenders don't require home inspection, but I recommend that every single buyer, no matter what, gets a home inspection. The last thing you wanna do is have a hidden defect or something that you did not know to check or have checked on a home that you're purchasing. So you're gonna have to pay for that home inspection. Have you planned to pay for the appraisal? So many factors go into this, but that could be $500, maybe it's $600, maybe it's more. Have you planned for that? Have you planned that even if you have no down payment requirements, that you have closing costs and prepaid items?

Check out some of my other videos to talk about the difference, or check out the differences of those things. But as an example, maybe you have no down payment at all, but by the time you pay closing, which is lender, appraiser, title, company, clerk, or court, which could easily be 3, 4, $5,000, sometimes more, it depends. Then you paid prepaids, which is your home insurance, property taxes, to set up escrow, maybe homeowners association dues, condo dues, things like that, and you're gonna pay those prepaid items at closing. What if that's another 3, 4 or $5,000? Yes, we just talked about 7 to $10,000 before you ever touch a down payment on a home. But don't let that deter you because many, many people ask the seller for help on those things. So that does not mean you need that much, but I'm trying to prepare you for anything and everything that I can think of. 

There are so many commercials that say, "Buy a home for $500, buy a home for $1,000," but they forget to talk about all the things I'm mentioning today in this video that are so important. The last thing you wanna do is purchase the home of your dreams, to get yourself over your head and be uncomfortable with that decision that you've made. So I want to help educate you in every which way that I can. 

In addition to all of this. I know it's a lot, I know it's kind of a long video. Please bear with me. It's so, so, so important. Hopefully you'll watch it more than one time. Hopefully you'll take your notes because I want to set you up for success as a homeowner. 

Did you know that you have property taxes when you purchase a home? A lot of times that's with an escrow, which will be made monthly with your mortgage payment, but you wanna understand that and you don't wanna forget about it. I've got other videos on that as well. 

And some other things that you don't wanna forget about. What have you have a well or a septic tank or those things need repair or upkeep? Make sure you know that and that you're budgeting for that. 

People don't think about this, but what about a termite contract? I have a termite contract and I spend probably, I don't even know, 8 or $900 a year to maintain that termite contract, so just another precautionary measure as a homeowner. Are you budgeting for that? 

If you liked this video, don't forget to give me a big old like, a big thumbs up. 

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Let's connect on social media:,, I'm on Facebook under Weeks Team.

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In the comment below, in that section, or maybe even in the bio, I am going to drop a link to a free copy of my book, "Mortgage Peace" to help you better understand the process and set yourself up for success.

September 14, 2020
First-Time Home Buyers