So, you’re thinking about buying a house but wondering if the time is right and if you can afford that mortgage. Psssst, here’s the thing: if you’re currently renting you already ARE paying a mortgage, it’s just not your own. Maybe you’ve come to that realization and that’s why you’re here. While we have your wheels turnin’ there are a few things to consider in addition to mortgage payments that you’ll want to keep in mind as you consider taking this next big step. Today we’re covering 8 ways to assess if you’re ready to be a homeowner. Let’s dive in.
First up, you’ll want to take a hard look at your career. No one ever wants to think about the potential for layoffs but it is a factor that must be taken into. What do future advancements look like and when do they happen? Will your job be relocating you for any reason? Which brings us to our next question.
Length of Stay
How long do you plan on living here? If you have exterior factors determining your ability to stay in one place for long this is something to keep in mind. It is important to assess how you need to live in a home to break even and how long it would take to potentially make money on your investment.
our credit score will determine two things. It will determine whether you can qualify for your mortgage and it will also affect your interest rate. Know that if your credit score is under 500 you may struggle to qualify for a home loan. Find out what your current credit score is and make a plan to improve it if you aren’t happy with where it is currently. Additionally, speak with a lender about what your options are.
What’s the market like? Evaluate those market conditions! Consider two things: current interest rates and consider home prices in the area you plan to buy.
When you find a home you like, always inquire about if it’s a part of a Homeowners Association (HOA). A general rule of thumb is to consider the community’s amenities. If the neighborhood has a significant amount of amenities you’re more likely to pay higher HOA fees.
Tax and Insurance rates
The amount you pay in property taxes depends largely on where you live. Additionally you’ll want to consider how much you’ll pay annually for homeowner’s insurance. Insurance rates also vary.
How much do you have in savings? Ultimately, the amount of money you have will impact how much you can put towards a down payment and therefore which type of loan you can qualify for.
Do you have any? Unfortunately any debts you have will be factored into your ability to qualify for a mortgage. Lenders will take into consideration obligations like student loans, car loans, and credit card debt.
If after assessing these 8 categories you feel you’re in relatively good standing to start building your own equity with the purchase of a home it’s time to speak with a Lender. A lender will help inform you of your best options and direct you towards next steps. Our Lender team can answer your questions, inform you of your best options and make you aware of special incentives available. Get in touch today!
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