Are You Ready To Buy

Dated: 11/28/2016

Views: 138


Owning your own home is part of the American dream. But it takes more than just dreaming to buy and maintain a home. Before you take the plunge, here are some things to ask yourself.


Does it make sense to buy?


Buying instead of renting needs to make sense financially. To help you decide, play with Zillow’s Buy vs. Rent calculator to see how many years it will take before the cost of buying equals the cost of renting. It’s called the breakeven horizon, and it varies by area of the country.


If you plan to stay in your home past your breakeven horizon, then buying makes financial sense. If you think you’ll move earlier, then renting may be the way to go.


Are you financially ready?


Buying a house involves raising a down payment and paying a monthly mortgage, which lasts anywhere from 5 to 30 years, depending on the home loan you can afford and are offered. There are other costs as well, but let’s focus on the big money.


Down payment: It’s the lump sum you’ll pay upfront that funds equity in the property and proves to lenders that you’ve got skin in this homeowner game. Down payments vary. In the go-go days that led up to the housing collapse, some lenders dismissed the down payment altogether – and we see how well that ended. Today, 20 percent is preferred and often gets you the best rates, but some loans allow down payments as low as 3 percent. Sometimes parents or friends can offer help with the down payment. If you have a choice, take a gift rather than a loan, not only for obvious reasons, but because lenders will add that debt to other monthly obligations and potential mortgage payments to determine your debt-to-income ratio, which generally can’t top 43 percent to qualify for a home loan.


Monthly mortgage payments: This is what you’ll pay each month. In most cases, a mortgage includes the loan principal and interest (both amortized over the life of the loan) plus homeowners insurance and property taxes (pro-rated). When credit was tight, getting a mortgage at any rate was reserved for only the most credit-worthy borrowers. Things have loosened, but lenders still want to know that you’re a responsible, gainfully employed and credit-worthy candidate.


Are you emotionally ready?


Owning a home is a huge commitment so before jumping in, consider if you are ready to make lots of decisions, from picking an agent to picking paint colors. Are you confident enough to select a neighborhood where you’ll want to stay for a while? And are you up for devoting the time and attention to maintaining a home? Weekends will disappear under chores like pulling weeds, cleaning gutters, shoveling snow, sealing counters and decks, and on and on. Taking care of your biggest investment can be gratifying but only if you’re ready.


Do you have the skills?


Your home will require regular maintenance and repair, and there’s no landlord to call for help. You’ll need some basic handyperson skills so you won’t not go broke hiring a repair professional to remedy every odd sound or smell. Here are some things every homeowner should learn how to do:
• Change a toilet flapper
• Shut off the main water valve and outdoor faucets
• Change a furnace filter
• Clean gutters of debris
• Change smoke detector batteries
• Locate and flip breaker switches
• Locate studs to hang shelves
• Paint a room


To begin or grow your homeownership skills, watch our home improvement videos.

Source: Zillow.com

Want to Advertise on this Site?

Latest Blog Posts

Backyard Updates

7 “Oh Yeahhh” Projects That Make Your Backyard Staycation-Worthy But not all are equal when it comes to investing in your home.Mow the grass, weed the garden, seal the deck, rake debris. You

Read More

2631 Martinez Lane Riverside 92503

#OPENHOUSE this Saturday from 11-3pm!! Best Bang for Your Buck...in this beautifully maintained four bedroom, three bath, cul-de-sac home. The formal living and dining room along with the

Read More

EASY LANDSCAPING UPGRADES

No need for fancy DIY skills, a lot of money, or a ton of time to pull off these yard upgrades.It’s your yard — yours to do with as you wish. And while that’s great, that doesn’t mean you

Read More

Days On The Market Drops To New Low In April

Days on The Market Drops to New Low in AprilAccording to recently released data from the National Association of Realtors (NAR), the median number of days that a home spent

Read More