Things To Think About Prior To Purchasing

Do you have a steady job and reliable source of income?

Homeowner's insurance and taxes typically go up each year. This means that if your taxes and insurance are escrowed and included in your mortgage payment, your monthly mortgage payments will typically increase each year.

Utilities for a single-family home will probably cost more than an apartment. As a homeowner, you will be responsible for paying for the electric, water, sewage, heating, trash, and all other household bills.

What is your credit history like?

When you attend pre-purchase counseling the importance of a good credit history will be discussed, as well as information on budgeting, obtaining financing, predatory lending, purchasing a home, insurance, and avoiding foreclosure.

If you are not quite ready to purchase a home, the counseling agency may suggest you enroll in Financial Literacy counseling. This counseling will provide you with one-on-one assistance to clean up your credit.

Franklin Street Community Housing Corporation (FSCHC) is working with individuals to obtain Individual Development Accounts (IDAs). These are special matched savings accounts designed to help families and individuals of modest means establish a pattern of regular savings, and ultimately, purchase a "productive asset." This program provides a $3 match for every $1 you save. If you are interested in establishing an IDA you will need to contact FSCHC at 517-482-8708.

Do you plan on remaining in one place for at least a few years?

According to the Internal Revenue Service (IRS), you must owner-occupy your principal place of residence for at least 24 out of the last 60 months to be eligible for an exclusion from capitol gains tax.

If you participate in the city's down payment assistance program, you need to owner-occupy the home purchased with DPA funds for at least ten years.

Are you capable of doing routine home maintenance?

You will now be the landlord. According to HouseMaster of America, a nationwide home-inspection company, most people spend 1 - 3% of the price of their house on annual upkeep.

Have you thought about what items you will need to purchase or receive as gifts in order to do regular maintenance?

Homeowners need some basic items in order to maintain their home's appearance and structure. Following is a list of some tools you may need:
  • Hammer
  • Lawn hose
  • Pliers
  • Rake
  • Saw
  • Tape measure
  • Utility knife
  • Wheel barrow
  • Wrench
  • Electric drill and bits
  • Lawn mower
  • Level
  • Paint tools (roller, tray, brushes, etc.)
  • Putty knife
  • Screwdrivers
  • Shovel
  • Snow shovel
  • Vacuum

The following websites have some valuable home maintenance and repair information:
You will probably want to purchase furnishings for your new home like window treatments, rugs, furniture, etc. It is important that when you are buying these things that you do not go overboard or you will have trouble making your mortgage payment.