The No. 1 Question All Homebuyers Need To Ask Themselves

Buying a home is a huge milestone in life. There are multiple factors to consider and several different questions you should ask yourself in order to determine whether or not the home you have chosen will be a good investment and if it will serve your family's needs for years to come.

Out of all the questions you can (and should) ask yourself, there is one that is more important than all the rest. The answer to this question will impact your future in more ways than you may realize at this point in time.

How much home can I afford?

This question is multi-faceted. The first answer that comes to mind may not in fact be as accurate as it seems. This week, our Lake of the Ozarks title company is here to explore some of the different factors that will influence your true answer to this question.

Mortgage Payment
Your monthly mortgage payment is the most obvious cost that new homeowners face. The size of your mortgage payment will depend on several different factors, such as the total loan amount, the interest rate, the duration of the loan, and the type of the loan. As a homeowner, it is critical that you be able to make this payment on time every month; failure to do so can severely damage your credit score and may ultimately cause you to lose your home. 

Utilities are another important cost that homeowners will have to cover. The exact utilities your home will require will depend on the specific property, but they may include any combination of the following: electricity, gas, water, sewer, trash, recycling, telephone, cable, and internet.

Property-Specific Costs
Depending on the property you decide to purchase, you may be responsible for additional fixed expenses on top of your standard utilities, such as homeowners association dues. You will also be required to cover the cost of any desired upgrades or required maintenance/repairs. Additionally, you mayelect to hire professionals to help with other aspects of your home maintenance, such as lawn care, household cleaning, and/or pest control.

Homeowners insurance is a crucial service for homeowners. Your home is a huge investment, and property insurance protects that investment by guaranteeing financial assistance in the event that your home is damaged or destroyed. If you obtain a mortgage loan to purchase your home, securing property insurance will most likely be a non-negotiable aspect of the loan approval process. Even if you purchase your home out-of-pocket, it's still a good idea to secure property insurance.

Closing Costs
Finally, all homebuyers will almost always be required to cover the closing costs associated with their home purchase. Closing costs include any number of different products and services, such as the home inspection, appraisal, title search and insurance policies, loan origination fees, etc. The total closing costs usually range from about 2.5-4% of a home's purchase price. For a more thorough look at what is included in the closing costs, view our earlier blog post.

How Much Home Can You Afford?
As you can see, the amount of home you can afford will depend on much more than the home's purchase price and subsequent mortgage payment. You'll want to obtain a mortgage payment that is low enough to enable you to afford the other aspects of homeownership, such as utilities, HOA dues, insurance, and the upfront closing costs. By working with a lender to get preapproved (or, at the very least, prequalified) for a mortgage loan, you will be able to get a better understanding of this bigger financial picture.

Trust Arrowhead Title, Inc. To Conduct Your Closing!
If you are preparing to buy a house at the Lake of the Ozarks, we hope you'll consider our title company in Lake Ozark MO to assist with the process. Our experienced team members are here to help facilitate your closing to promote a successful transaction process. If you would like to learn more about our Lake of the Ozarks title services, give us a call at 573-302-1950 or visit our website at

The Lake of the Ozarks' Most Trusted Title Company
Where Accuracy Matters!

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750 Bagnell Dam Blvd Suite B
Lake Ozark, MO 65049


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