Ah, the renter’s life. No need to worry about maintenance and repairs, and when you want to move to a different neighborhood, you can simply pick up and go once your lease is finished. But what about those other noisy tenants, never having a place to park, flaky roommates, the unresponsive landlord, and limited space for your stuff?
If you’re thinking about these things, you might be considering taking the step toward buying your own home – your own yard, your own parking, your own space – it’s the American Dream! Or, maybe you’re thinking of homeownership from an investment standpoint, which is definitely a major advantage.
With all these great financial and emotional benefits, however, it’s important to know if you’re actually prepared to buy a house. We all remember the housing crash in 2008. Unfortunately, a part of the problem was that people who bought houses weren’t financially ready to be homeowners, which was devastating to the economy. Before you make one of the biggest financial decisions of your life, you should ask yourself the important questions – otherwise, your American Dream could become a nightmare.
Not sure if you’re ready? Take the quiz!
For Your Consideration
Before you begin your house search, here are some things to consider:
Savings– How much do you have in your savings account? It’s important to look beyond just having savings for the down payment. You’ll need to know you’ll have money for moving expenses, home maintenance costs and the not-to-be-overlooked emergency fund.
Timing– Do you plan on staying in the same geographical area? Is there a good chance your job will be relocating you, especially in the next 5-years? If you’re renting, are you in a rush to move? If you’re planning on moving soon or you’re in a rush then maybe now isn’t the right time for such a commitment.
Credit Rating– Have you historically paid bills on time? Hopefully so. A good credit rating can help you get a better interest rate on loans, and help you get quick approval.
Student Loan Debt– Do you have any? How much? And what effect will it have on your ability to pay a mortgage on top of it? You don’t want to buy a home if it’s going to put you in too tight of a financial situation. Understand all your debts before adding another major one to the mix.
Talk to a Mortgage Lender– A pre-approval from a respected firm, like Accunet, is a must. Most people will need to finance their potential home in the form of a mortgage so talking to a professional for pre-approval will give you a good idea if you’re financially ready and can afford to buy a home.
It’s important to remember that this checklist isn’t one-size fits all. Each situation requires a personalized approach, but the five items highlighted here are a good start when deciding if you’re ready to buy your first home.
Think it’s time to buy your first home? Read the full overview of our First-Time Home Buyer Loans here and then click that blue button to start your Rock-Solid Pre-Approval.
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