Homeownership costs more than the sale’s price

According to an S&P study released earlier this week, home prices dropped a record 15.4% in the second quarter compared with last year. (Visit CNN.com to see which cities faired the worst.) With falling prices and a lot of inventory to choose from, you might be thinking that this is a good time to get a great deal on a new home—particularly if you don’t have a home to sell first.

Even if you are one of the lucky few who are only buying, it is important not to underestimate the true cost of homeownership. You may get a home for a good price; however, there are many additional costs that are incurred by new homeowners. There are up-front costs, including the down payment and closing costs. The other costs you may incur include realtor’s fees, property taxes, and homeowner’s insurance. The costs most people are surprised by are the little things you need to buy once you get into the house, so a realistic budget is essential.

The other thing you must consider is the cost of financing your new home. It may be wise to improve your financial standing before you buy a house; even it takes some time and effort. For homebuyers with less than perfect credit, mortgage loans are tougher to get then they were in year’s past.

To learn the steps to homeownership and find out if you are ready to buy, sign up for a first time homebuyer’s workshop.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.