15 Questions to Ask Before Buying a Home

Chances are good that your home will be your most expensive purchase, and your mortgage will be your largest debt. The purchase can help you to build wealth over time. But it could also be one you come to regret if you buy the wrong house or act before you're financially ready.

To maximize the chances that your decision to buy a property will pay off rather than backfire on you and make your financial situation worse, ask yourself these 15 questions before you commit to a purchase.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

You don't want to buy a house while the real estate market is in a bubble, as there's a good chance it could crash and leave you with a property that's not worth what you paid for it.

Of course, you don't want to purchase a property in a neighborhood that's going downhill either. You'll want to make sure that home values are rising at a slow, steady pace in the neighborhood you're interested in. So, check recent sales and talk with a realtor to see whether you can spot any trends in pricing before moving forward.

ALSO READ: What Rising Home Prices Mean for Your Real Estate Investments

You definitely don't want to overpay for an individual property -- potentially your largest purchase -- which can sometimes happen if you think with your heart instead of your head.

To make certain you're paying a reasonable price, check comparable sales of similar properties. If houses with similar features and square footage are selling for a lot less, then the home you're looking at isn't a good investment.

Traditionally, realtors recommend buying the worst house in the best neighborhood. That's because location can't be changed, and many people shop based on the area their house is in.

You also don't want to spend extra money on a house that's been over-improved. A property that's much nicer than those around it is unlikely to be attractive to future buyers who want to live in a place where their neighbor's property values are similar to their own.

ALSO READ: Why Are Home Prices So Expensive Right Now?

Older homes have a lot of charm, but they can turn into money pits if too many repairs or upgrades are needed. They could also cost more to heat and cool if not properly insulated and lack modern safety features or conveniences.

If you're thinking about buying an older house, be sure to have it carefully inspected by someone familiar with properties of that era. This can save you a lot of heartache later on.

If a home is a few decades old and major systems haven't been updated, you could find yourself on the hook for a new roof and air conditioner and some replacement appliances.

You'll want to find out whether any of the costliest home systems have already been upgraded. If so, then the house may be worth more than others that will need a lot of work upon moving in.

Don't just focus on aesthetic upgrades either. It can be much cheaper to replace old tile in a bathroom than to put a new roof on a house.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

If homeowners have made changes to the house, you'll want to make absolutely sure they've obtained the required permits. Otherwise, the work may not have been done to code.

And if unpermitted work is discovered later, you could be responsible for fines and for bringing the property up to required standards.

ALSO READ: Why It Doesn't Pay to Skip the Permits When Improving Your Home

Whether you have kids or not, you should find out about the quality of local schools before buying a property.

This is a top priority for most parents. And if your house is in a bad district, it's likely to take longer to sell and appreciate more slowly, if its value increases at all.

Property taxes can be a huge expense, sometimes costing as much as your mortgage. And in areas where property taxes are already high, there's a good chance the cost will increase regularly over time.

You'll want to be absolutely sure that these taxes are affordable for you -- you'll be stuck with them forever, even after your home loan has been paid in full.

ALSO READ: 3 Reasons to Fight Your Property Tax Bill

Pay attention to what construction permits have been pulled in your area. If your neighbors are planning a huge addition that will block your new view or an industrial warehouse will soon be built across the street, this could adversely impact both your own future property value and your enjoyment of the home you're thinking about buying.

Most people borrow to buy a home. If you'll be taking a loan, you'll want to keep tabs on current mortgage rates.

The higher the rates at the time you borrow, the more interest you'll pay and the more expensive your home will become. To keep your financing costs at a minimum, you may want to wait to purchase until you're in a low-rate environment.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

It's not just national trends in mortgage rates that can affect your borrowing costs. Your own financial credentials determine what interest rate a lender offers you.

You'll want to be sure you have good credit, not a lot of debt, and proof of stable income to qualify for the best possible rate. If any of these criteria need improvement, consider working on your finances before moving forward with a home purchase.

ALSO READ: Make These Moves Today to Qualify for a Mortgage in 2022

You don't want to end up house poor, which usually means your housing costs would eat up more than 30% of your income. You also don't want to risk buying a home only to lose it to foreclosure.

So, before moving forward, make sure your mortgage payment, property taxes, utilities, and HOA costs will fit easily within your budget. And be sure you have emergency reserves to cover these costs in case of an interruption in income.

If you don't plan to stay in the property you are buying for at least two years, you may want to think twice about purchasing it. Moving after less time means you're likely to lose money since your home may not appreciate enough in value to cover the transaction costs of buying and selling.

Buying real estate for just a short period can also mean you'll owe more capital gains taxes if you're lucky enough to make a profit. If you stay in your home for at least two years, these can often be avoided altogether.

ALSO READ: Is Buying a House a Smart Move for You?

Homeowners associations are common, and they have pros and cons. You'll have to live by the HOA rules if you move into a neighborhood with an association. And you may have to pay high fees. However, HOAs can help to maintain your property value.

The key is knowing whether there is an association and making sure you're comfortable with all that entails before moving forward.

Finally, there may be zoning rules and deed restrictions that affect what you can do with the property you're buying.

You'll want to make sure you're comfortable with any limitations on your rights as an owner before you make an offer.

5 Stocks Under $49

Presented by Motley Fool Stock Advisor

We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

Asking yourself these 15 questions can help to maximize the chances your home purchase will be a wise investment. The answers can also help you confirm whether you're really ready to buy and the property you're considering is one you're likely to be happy with.

You don't want to rush into making one of the most important decisions of your life, so it's worth taking the time to carefully think about each answer before making an offer on a property. You won't regret the extra time you spend ensuring your home helps you build wealth and provides a nice place to live for years to come.