Buying your first home can be both exciting and nerve wracking at the same time particularly when determining if this is the right time to take that plunge. Many prospective buyers struggle with deciding when that right time is. Purchasing a home can be a wise investment when done right. Here are a few tips to help you know whether you are ready to buy your home.
FIRST THING TO CHECK IS YOUR FINANCES, CAPABILITY TO PAY FOR MORTGAGE, CREDIT SCORE WITH NO POTENTIAL ISSUES
This means not only being able to stay current with future mortgage payments but also being aware of how your current credit score and other issues you may be unaware of can impact your start to ownership. Addressing them before starting any transaction would be the best move. Meeting with a Loan Officer would be a good first step to help review your credit score and debt to income ratio and to detect any problems that need your attention as it can strongly influence available interest rates and save you the hassle of trying to fix any issues on time as well as thousands of dollars in the long run. If the mortgage payments in your city is comparable to the cost of renting, it might be the perfect time to look at the type of properties you are interested in owning. A simple mortgage calculator will help you determine the estimated monthly payment as opposed to your monthly rent. Putting that monthly rent towards equity is much better than simply spending money on rent each month with nothing to show for.
SETTING DOWN YOUR ROOTS
Buying a home would be more to your advantage if you plan on keeping it for more than a few years. The benefits of buying are significant if you plan to own your home for more than a few years. If you intend on staying indefinitely in an area it’s always more practical to buy rather than rent. More than a couple of years of ownership before intending to sell would give you an idea on the potential financial benefits of your investment.
PREPARE FOR ANY EVENTUALITIES OR UNEXPECTED COSTS
This means that you have enough savings to cover the down payment which will vary depending on the property you are looking at. It would be good to prepare at least 20% of the total amount as down payment just in case, as well as a little extra for possible processing fees, transaction, the actual move and any unforeseeable expenses. Your Loan Officer knows and understands what a first time homeowner feels and will be very much willing to answer your questions and address your concerns, help you review your goals and more importantly, generate an estimate for how much you can save. Whether you’re thinking of buying a home soon or a few years down the road, setting aside funds for your future home is always a great idea.
Contact Nike Bergum of Marketplace Home Mortgage for any questions on how to get ready on buying your home.