Are you Ready to Buy a Home?
Blog Date 5/10/2022 2:30:00 PM
With low mortgage rates and rising rents, it certainly seems like all signs are pointing to buying a house. But are you ready? These questions will help you figure out if now is your time to buy.
Are you stable?
Buying a home can involve a significant cash outlay at the beginning. You earn that money back over time as your home’s value increases. Because of that, most experts recommend that you only buy a home if you’re in a position to stay in one place for five or more years. If you are in a temporary job or you’re thinking about moving to a different part of your island, a different island, or the mainland within the next few years, now might not be the right time. But if you’re in a steady job and love where you are, this is probably a good time to buy.
You’ll also want to make sure your income is steady and sufficient enough to afford to buy a house. Your employment history is an element in determining whether a lender will approve you for a mortgage loan. They will want to make sure you have enough income to cover your mortgage payments and are someone likely to remain employed.
Do you have a full savings account?
When you buy a house, that cash outlay includes a down payment of up to 20% of the home’s value, closing costs on the mortgage, and moving expenses. Still, you might encounter other expenses once you move in, such as unanticipated repairs, new furniture, and landscaping changes. Anyone who has bought a house can attest that there is always something to spend your money on.
Is your credit solid?
Your mortgage rates and approval odds are directly related to your credit score. If you’ve got negative items on your credit report, you might want to spend some time rebuilding your credit before you buy a home. Unless you refinance, you’ll be living with your mortgage rate for 15 to 30 years, so you want to get the best rate and terms possible.
Also important is the amount of debt you already carry. If you’ve got high credit card bills or expensive car payments, you might consider paying down some of your debt before shopping for a home so that your debt-to-income ratio is attractive to lenders.
Do you understand the home buying process?
Does your head start swimming when people talk about escrow, down payments, and PMI? Then you might need to learn more about the process of buying a home before you are ready to get started.
But if you’ve explored what happens after you find the home you want to buy and understand the steps you need to take before you can move in, then you’re probably ready to start looking for your own home.
Can you maintain a home?
Even brand-new homes need maintenance. And your maintenance needs increase as your home gets older.
Are you prepared to take care of roof issues, HVAC problems, plumbing challenges, and other things that can crop up? You don’t have to fix everything yourself, unless you have the skills and tools, but you do need to know how to spot problems and hire the right help to do the work.
Are mortgage payments likely to be lower than rent?
Housing prices are increasing quickly, but rents are going up, too. If your rent is more than a mortgage payment might be, then buying might be a smarter financial choice for you. Explore average rents and compare them with your estimated mortgage payments on a typical house in your area to make sure buying is really the best option right now.
Do you want to own a home?
Home ownership is part of a traditional path. You get married, buy a house, and have kids. But you might not want to follow that path — or you might want to put it off for now. And that’s okay.
Ask yourself if you’re ready to take the big step of settling down in a house. You might want to stay more flexible. Or you might prefer to have someone else take on the responsibility of maintenance and repairs. If so, then wait until the time is right.
But if you are ready, we can help. Find out more about mortgages and contact our mortgage loan officers today.