15 Key Things to Know Before Buying a House

Chances are good your home will be your most valuable asset. Since your choice of house can affect your finances in profound ways, it's imperative you're fully informed before making a purchase.

So what exactly do you need to know before you commit to buy? Here are 15 key things.

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Most people need a mortgage to buy a home. And since you'll probably be paying your mortgage off for at least 15 years (and more likely for 30), you want to make sure your loan is as affordable as possible.

That means you should get prequalified by a lender to find out how much you can borrow and at what rate -- and you should figure out how much your monthly mortgage payment will be for the home of your choosing.

You'll want a mortgage payment that fits comfortably into your budget so you don't end up house poor and unable to accomplish other financial goals.

Property taxes are another big expense associated with homeownership. And they can vary dramatically depending where you live and the cost of your home.

You should be able to see what property taxes the current owners are paying, but be aware that your home may be reappraised and your taxes could go up after you purchase it.

Check with your county tax collector about the process and the tax rate where you live to get a better idea of what your payment will be.

You're also going to need to insure your house -- both because your lender will require it and to protect the value of your investment.

Insurance can cost several thousand dollars a year depending on the value of your house -- especially if you live in an area prone to earthquakes, floods, or other natural disasters.

An insurance agent should be willing to give you an estimate of what your insurance costs are going to be.

Some areas of the country are designated as flood zones because of their proximity to lakes, rivers, streams, or oceans.

If you live in a flood zone, you may be required to buy flood insurance as an add-on to your regular policy. This can add to your monthly costs.

Of course, you'll also be taking on the risk of your home flooding -- which, needless to say, can be a major hassle.

In some neighborhoods, homeowners associations (HOAs) enforce strict codes of conduct.

You may, for example, have to keep your grass short or be required to keep your garage doors closed at all times. And you may be prohibited from certain behaviors such as parking a boat or trailer in your driveway or renting out your home.

Being subject to HOA rules can restrict the choices you make with regards to many aspects of your property, so be sure to understand what the requirements and limitations are before you buy.

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In some neighborhoods, you're also required to pay dues to your homeowners association. If your community has tons of amenities, this can also add thousands onto your annual housing costs.

Make sure you know up front if you'll have to pay these expenses and decide if you're comfortable committing to them for the rest of your time in the home.

The age of the house is important for many different reasons. First, older homes may need more extensive -- and expensive -- repairs if they haven't been upgraded already. For example, if a house is 25 years old and has the original roof, you can expect that you'll need to pay to replace it sooner rather than later.

Plus, there may be issues with dangerous building materials in older homes, such as asbestos or lead paint. None of these things should necessarily deter you from purchasing -- but you need to be aware of the risks so you can take proper mitigation steps if you remodel.

ALSO READ: The Definitive Guide for First-Time Homebuyers

Whether you're buying an old home or a newer one, you'll want a home inspection done of any house you're considering purchasing.

An inspection could reveal serious problems ranging from termites or mold to a failing HVAC system. You don't want to find out the house you purchased is structurally unsound or needs surprise repairs immediately.

There are a number of costs associated with completing the purchase of a home that go beyond just the mortgage payment.

You may have to pay a mortgage origination fee, as well as the costs of an appraisal, a credit check, and a survey.

And you'll almost assuredly have to pay transfer or recording fees to your county, prorated taxes and HOA fees to the current owner, and title insurance costs.

All of this can add up to several thousand dollars, so you must make sure you're prepared for this expense.

ALSO READ: Average Closing Costs in 2020: What Will You Pay?

Zoning plays a big part in what you can do in your neighborhood -- and what others can do as well.

If you're planning to run a home-based business or build an in-law apartment, for example, you'll want to know up front if you're allowed to do that.

And you'll also want to find out if you could end up with a gas station, landfill, or large housing complex right on your street. You can talk with your county about what's allowed so you can get a better idea of what to expect.

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Even if your home is in good condition, it's going to need regular maintenance. You should be prepared for this and make sure it fits into your budget.

Typically, you can expect to spend around 1% of your home's value each year on maintaining it. Even if you don't spend this in some years, you'll make up for it when you have a year with a big expense.

If you can't afford the mortgage payments and maintenance costs, you can't really afford the house.

You'll also have monthly utilities to pay, including for electric, sewer and water, and internet.

It's smart to get an idea of what these will cost, especially if you're upgrading to a much bigger home than you're used to or if you're moving to a rural area where your options for high-speed internet are limited.

If you have children, the school district is very important because you want to make sure your kids are getting a quality education.

Even if you don't have kids of your own, many families do -- so the school district plays a major role in determining property values. If you buy in a poorly rated district, be aware this could limit the pool of potential buyers going forward.

You'll also want to make sure you're moving to a safe area. You can check local crime rates using many different websites online and compare them to the national average to get a good idea of the risks your new neighborhood presents.

Finally, you'll want to find out if any big projects are planned in the area that could affect your home's future value.

You don't, for example, want to buy in a little out-of-the-way area only to find out the county has plans to put a major highway in your backyard.

You can usually look at your local Department of Transportation's website as well as the website of the local permit office to find out about major planned projects coming up in the next few years.

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As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

As you can see, there's a lot to know before you commit to buying a home. By doing your research, you can make sure you make a choice you're happy with for the long term -- and one that has a positive impact on your financial situation.