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Getting Ready To Buy A Home

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Okay, so it may be acceptable to get that gorgeous leather handbag or fancy new camera on an impulse, but is it smart to make that same type of choice when buying a home? Let’s go ahead and agree that it’s not.

Becoming a homeowner, whether it be the first time or seventh, this fact is inevitable; it’s a seriously big financial decision that no one should make without planning and thinking through, much less on their own. That goes without saying you don’t have to be hitched or have Mom there to hold your hand, but realtors and real estate agents are here to make this process much more easy and affordable for you.

Why Buy A Home?

Here come the emotions when you ask yourself, “Why am I choosing to buy a home?” Maybe you feel your career requires a little more stability on the home front than having to live under someone else’s roof (a.k.a. Your landlord or a binding lease agreement at an apartment complex). It’s important and fulfilling to live and establish yourself into a neighborhood of your choice where you can be free of restrictions on what color the living room walls are going to be or whether or not you share a laundromat with 4,000 other tenants. (Yuck!) C’mon, nobody likes to ask for permission! Unless, of course, you’re married to the man of your dreams and it’s only fair you run it by him before you paint the bedroom pink. I’m sure he won’t mind, right?

This lifestyle choice depends on how you enjoy spending your time at home and the type of community you would like to be apart of. There are many options. A rural countryside home with a white-picket fence, a cozy home in the suburbs just down the street from the park in a gated community, or if you’re a city person, a tall high-rise condo inside a luxurious building. The better you understand your reasons for purchasing a home, the less stressful you will find narrowing down real estate decisions to be. Homeownership is one of the smartest investments you can make in your lifetime. It will increase your personal wealth for you and your family by building equity as you pay off your mortgage.

Is Your Bank Account Ready?

Let’s face it, maybe you and your finances aren’t at the point of being able to afford that million dollar mansion you envision in your dreams but you can work towards becoming a homeowner the moment you earn your first paycheck. It’s that simple.

Qualifying for a mortgage requires a healthy credit score, consistency in paying bills on time while still saving money with a maximum debt-to-income ratio–your gross monthly income in comparison to the minimum payments on all recurring debts– of 43% or less. Some lenders have stricter guidelines, so the lower your debt-to-income ratio, the better chance you have of a loan approval.

Although loan programs are available, don’t forget to factor in moving expenses, earnest money deposit and having some savings to pay for closing costs. It’s also a wise choice to have cash reserves on hand after you buy. Saving money, preserving and improving your credit score are both essential elements to owning a home.

What’s in your price range?

Housing prices and rents vary from one place to another, but you can use a vast assortment of websites to estimate the differences between your current rent and buying a home. In some markets, buying a home can cost the same, if not less than renting. 

There are many important expenses you must remember about being a homeowner such as homeowners insurance, property tax and Home Owners Association dues. In addition to these expenses, also think about your future plans and how you spend and save your money along with the comfort level of a mortgage payment. You will be told how much you can borrow by a lender but they won’t know your other expenses. For example; travel, golfing and other hobbies you may have interests in. 

Once you have considered all of these important factors of the emotional and financial aspects of becoming a homeowner, your next step is to find a reliable, experienced realtor to be your trusty sidekick in this home-buying process and also to meet with a reputable lender who can discuss with you your options for financing this extremely important purchase. 

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