It's More Than a Mortgage

Bruce K. Sneed, a financial planner in Woodbridge, pointed out that extra cash is especially important if you are buying a place significantly bigger than where you live now. "If you buy this giant house, you're going to have to furnish it -- or you're going to be walking around in a bunch of empty rooms."

Andi Fleming, a real estate agent in Long & Foster's Brookland office who worked with Laplante and Keiver, said she advises first-time home buyers who are dreaming of big renovations to be especially cautious. "The cost can be extraordinary."

But even regular maintenance can add up. And, Fleming warned, "if you don't pay for it annually, you will pay for it when you sell the house."

Schaeffer suggests that prospective home buyers draw up an estimate of what their budget will be after they buy and then follow it for six to 12 months. "It's an easy way to prove to them that they are not quite ready -- or get them motivated."

Another key factor: the ability to save. "People have to be serious enough about it to collect a down payment first," Schaeffer said.

There are still loan programs that will allow people to buy with less cash upfront, but Sneed encourages his clients to rent until they save a 20 percent down payment.

That discipline to save will pay off when renters become homeowners, both planners said.

"When you're a homeowner, not only do you have to make those very predictable monthly expenses, but you have to be prepared to protect that investment," Schaeffer said. "So let's have a little bit of wiggle room."

How much would-be buyers need to save depends in part on how reliable their income is. For example, she pointed out, "a federal government job is usually pretty darn stable," but someone who is self-employed may need a bigger cash cushion.

Still, even with a stable job, she said, there are no guarantees in life. One time when you go to the dentist, "it's going to be something big," she said.

She said people should ask themselves how long they can go without a paycheck should they lose their job or get seriously ill. "How many months before I am groveling at Aunt Sophie's feet? You ought to be able to go three to six months," she said.

But would-be buyers shouldn't limit their analysis to the cost of owning the home, the planners said. They should also make sure ownership won't prevent them from meeting other financial goals, such as buying a car or saving for college and retirement.