Are You Ready To Buy a Home?
Buying a new purse or a new tool can be an impulse buy but buying a home should be a well thought out decision.
It is an big emotional and financial decision, that should not be taken lightly. Ask you yourself, Why do you want to buy? Are you financially ready to buy? How do you know what you can afford?
Think about what is important to you within the area you are looking to buy in.
Buying a home is a HUGE decision whether it be you are a first time home buyer or a repeat buyer.
Why do you want do buy?
Buying a home is a lifestyle choice that makes you think about planting roots in a community or neighborhood that you are comfortable in for at least 5 years. It also should make you think about if you are financially ready and have stability in your career.
The more you think about what priorities are important to you about your dream home the more ready you will be in your real estate decision.
Would you like to live rural with few neighbors around? Or maybe you want to be on a cul-de-sac? Maybe, you are looking for a high rise condo with amenities within your building.
Maybe you want your own home to decorate or landscape without having to first discuss it with your landlord.
Are you purchasing a home that is new construction? If so you might want to also consider a new construction home inspection for it.
Home ownership is a powerful way to build equity and increase your families wealth as you begin to pay down your mortgage.
Are you financially ready?
When you are thinking about purchasing a home you need to understand the commitment you are making financially.
Also, it's good to understand what you are getting into when getting a mortgage. There is a lot of paperwork that comes with the home buying process.
Lenders will want to look at your bank statements to see what money truly comes and goes each month. Debt to income ratio, which tells them how much you have in bills or loans against what you bring in for income. The lower the debt to income ratio the better your chances are to getting a loan approval.
hey will want to look at any assets that you might have and what their worth is. Lenders will pull your credit report to look at your history of paying bills on time and not having too much open credit.
Having a good credit score is vital to getting a mortgage. If you haven't been with your current employer for at least a year, forget it.
They need to see longevity and stability to ensure that you will be able to continue to afford the mortgage loan.
Getting a mortgage is not an easy process so the more prepared you can be the better. Get all of your ducks in a row before going to the bank.
Don't forget you also have some costs like the home inspection.
How to know what you can afford
When looking at homes online it's important to know that other things come into play when estimating the monthly mortgage payment.
You can not simply take the selling price and divide it by 360 months (30 years). You have to consider the interest rate that you will get, and the taxes.
Interest rates are always changing so make sure to keep an eye on those as you are looking buy your home.
Sometimes you can lock in at a low rate when you get your pre approval but not always. The interest rate can significantly affect the final amount of your monthly mortgage payment so watch closely.
As you are looking at the area that you want to buy in make you look at the property tax.
Some towns are higher than others. There are so many variables that set the tax rate in each town so as you look keep an eye on the tax rate in each town as you might be looking in a few different areas. As with the interest rate the property taxes can have an affect on how much of a mortgage you qualify for.
Here is an interest rate calculator.
It is such an exciting time when you are thinking about buying a new home.
Make sure that you are ready before you start because it will make the process a whole lot easier and more enjoyable if you know ahead of time what you want and what you can afford.
Are you finding the buying process fun???