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.

  • The Consumer Federation of America (CFA) is an association of nonprofit consumer organizations that was established in 1968 to advance the consumer interest through research, advocacy, and education. Today, nearly 300 of these groups participate in the federation and govern it through their representatives on the organization's Board of Directors.
  • The National Council of Higher Education Resources (NCHER) is the nation’s oldest and largest higher education finance trade association. NCHER’s membership includes state, nonprofit, and for-profit higher education service organizations, including lenders, servicers, guaranty agencies, collection agencies, financial literacy providers, and schools, interested and involved in increasing college access and success. It assists its members in shaping policies governing federal and private student loan and state grant programs on behalf of students, parents, borrowers, and families.

  • Since 2007, the Homeownership Preservation Foundation (HPF) has served as a trusted, neutral source of information for more than eight million homeowners. They are partnered with, and endorsed by, numerous major government agencies, including the U.S. Department of Housing and Urban Development and the Department of the Treasury.

  • The mission of the U.S. Department of Housing and Urban Development (HUD) is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD works to strengthen the housing market in order to bolster the economy and protect consumers; meet the need for quality affordable rental homes; utilize housing as a platform for improving quality of life; and build inclusive and sustainable communities free from discrimination.

  • The Council on Accreditation (COA) is an international, independent, nonprofit, human service accrediting organization. Their mission is to partner with human service organizations worldwide to improve service delivery outcomes by developing, applying, and promoting accreditation standards.

  • The National Foundation for Credit Counseling® (NFCC®), founded in 1951, is the nation’s largest and longest-serving nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services.