10 Financial Factors to Consider When Buying a Home


Going Somewhere?

Moving into a new home across town involves some costs, but it might be a joy to pay them if you have the keys to your new home in hand. Some can even envision a move as their last, or at least the last they'll make in a long time. Going somewhere you love, whether to a new city across the country or a new condo a few miles away, might cost several hundred to several thousand dollars, but this is cash that usually hurts less because you planned for it. But what about the costs of when you have to move from a property you own and can't sell?

In the not too distant past, Americans bought homes with the idea that they would start families, pay off the mortgage and live there rent-free after retirement. More recently, buyers have lived in homes for the short-term, with a five- to 10-year plan for selling and moving up or out to another region.

Today, though, it's common for people in the United States to move about 12 times in a lifetime, with around nine of those moves occurring after age 18 [source: U.S. Census Bureau]. Whether relocating for a new work opportunity or to be nearer to family, when a moving checklist includes selling a home, it's not as easy as it used to be. And when you're unable to sell -- and make the payments -- the story becomes even grimmer. Short-sales, foreclosures and deed-in-lieu (turning the house back over to the bank) can cause long-term credit damage..

For every statistic and glimpse into buying, owning and selling a home, so many factors depend on the individual and as many -- or more -- depend on chance and unpredictability. Getting the numbers together is as much a science as it's ever been, and checks and balances along the way will confirm whether you've considered all of the financial factors and whether having a place of your own is worth every single penny: saved, earned or lost.

Related Articles

More Links


  • Armour, Stephanie. "Underwater Mortgages Drain Equity, Dampen Retirement." USAToday.com. March 26, 2010. (April 1, 2011)http://www.usatoday.com/money/economy/housing/2010-03-24-1Aunderwater25_CV_N.htm
  • Clifford, Stephanie. "The High Cost of a 'Free Credit Report'." The New York Times. Aug. 4, 2008. (April 1, 2011)http://www.nytimes.com/2008/08/04/business/media/04adco.html
  • CNN Money.com. "How Much Home Can You Afford?" 2011. (March 31, 2011)http://cgi.money.cnn.com/tools/houseafford/houseafford.html
  • CNN Money.com. "Money 101 Lesson 8: Buying a Home, Getting the Money Right." 2011. (April 1, 2011)http://money.cnn.com/magazines/moneymag/money101/lesson8/index3.htm
  • Consumer Credit Counseling Services (CCCS). "Debt Management Tools and Calculators: Debt to Income Calculator." 2011. (March 30, 2011)http://www.cccsstl.org/debt_test/cccs_debt_to_income_calculator.asp
  • Debweiler, Gerry. "Are you in over your head? Calculate your debt-to-income ratio." U.S. News and World Report, Money and Business: Tools. 2007. (March 30, 2011)http://www.usnews.com/usnews/biztech/tools/modebtratio.htm
  • Ellis, Blake. "Home Values Tumble 1.7 trillion in 2010." CNNMoney.com. Dec. 9, 2010. (April 1, 2011)http://money.cnn.com/2010/12/09/real_estate/home_value/index.htm
  • Equifax Consumer Services LLC. "Products." 2011. (April 1, 2011)http://www.equifax.com/credit-product-list/
  • Experian Information Solutions. "Check Credit Report." 2011. (April 1, 2011)http://www.experian.com/credit-education/check-credit-report.html
  • Federal Deposit Insurance Corporation (FDIC). "Consumer Protection: Truth in Lending." Dec. 10, 2010. (April 6, 2011)http://www.fdic.gov/regulations/laws/rules/6500-1400.html#fdic6500226.1
  • Federal Reserve Board. "What You Should Know about Home Equity Lines of Credit." Aug. 21, 2009. FederalReserve.gov. (April 1, 2011)http://www.federalreserve.gov/pubs/equity/equity_english.htm
  • Federal Trade Commission (FTC). "Facts for Consumers: Building a Better Credit Report." March 2008. (April 1, 2011)http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre03.shtm
  • FHA.com. "FHA Mortgage Calculator: How Much Can I Afford?" 2011. (March 25, 2011)http://www.fha.com/calculator_afford.cfm
  • Goldfarb, Zachary A. "Regulators Propose 20% Down for Mortgages." The Fiscal Times. March 30, 2011. (April 2, 2011)http://www.thefiscaltimes.com/Articles/2011/03/30/WP-Regulators-Propose-20-Percent-Down-Payment-for-Mortgages.aspx
  • Independent Insurance Agents and Brokers of America (IIABA). "Consumers Can Minimize Homeowner Insurance Non-Renewals, Rate Increases." IIABA.net. 2007. (April 6, 2011)http://www.iiaba.net/na/02_News/02_PressRelease/NA20070711114437?ContentPreference=NA&ActiveState=0&ContentLevel1=NEWS&ContentLevel2=NEWSPRESS&ContentLevel3=&ActiveTab=NA&StartRow=0
  • Insurance Information Institute (III). "If I file a Claim Will My Premium Go Up?." III.org. 2010. (April 6, 2011)http://www.iii.org/articles/if-i-file-claim-will-my-premium-go-up.html
  • Kiplinger's Personal Finance Magazine. "Why You Need a Home Down Payment." Money Central, MSN.com. 2011. (April 1, 2011)http://articles.moneycentral.msn.com/Banking/HomeFinancing/WhyYouNeedAHomeDownPayment.aspx
  • Kiviat, Barbara. "The Case Against Homeownership." TIME Magazine. Sept. 11, 2010. (April 1, 2011)http://www.time.com/time/business/article/0,8599,2013684-2,00.html
  • Mortgage Insurance Companies of America (MICA). "How to Buy a Home with a Low Down Payment." Pueblo.gsa.gov. 2011. (April 1, 2011)http://www.pueblo.gsa.gov/cic_text/housing/low_down/low_down.htm
  • National Association of Home Builders (NAHB). "Twenty Percent Down Payment Rule Would Disrupt First-time Home Buyer Market." NAHB.org. March 29, 2011. (April 1, 2011)http://www.nahb.org/news_details.aspx?newsID=12402&print=false
  • Relocation.com. "How Much Will My Move Cost?" 2011. (April 2, 2011)http://www.relocation.com/library/moving_calculator.html
  • Tully, Shawn. "Real Estate: It's Time to Buy Again." Fortune, CNN.com. March 28, 2011. (April 1, 2011)http://finance.fortune.cnn.com/2011/03/28/real-estate-its-time-to-buy-again/
  • U.S. Department of Housing and Urban Development (HUD). "Buying a Home." HUD.gov. 2011. (April 1, 2011)http://portal.hud.gov/hudportal/HUD?src=/topics/buying_a_home
  • U.S. Department of Housing and Urban Development (HUD). "Common Questions from First-time Homebuyers." Oct. 26, 2009. (April 1, 2011)http://www.hud.gov/buying/comq.cfm


Does Traditional Homeowners Insurance Cover Airbnb Rentals?

Does Traditional Homeowners Insurance Cover Airbnb Rentals?

Most homeowners insurance won't cover your home if you're renting it via sites like Airbnb. HowStuffWorks looks at insurance policies that will.