FEEL READY TO BUY A HOME? HERE ARE SOME THINGS TO CONSIDER
by Rick Delgado
on Wednesday, January 15th, 2020 at 6:25am.
Homes are going like crazy. There is nothing that could ever stop home buyers from getting the home they love. Whether it is paying a little extra or working longer hours to fit the budget, feeling financially stable is a key pre-buying step that all home buyers need.
Do you feel financially ready to buy a home? Here are some tips on how to know if you are ready to buy.
1.) Be Debt Free
Do you have any outstanding debt? If you do the first step is to figure out how much you owe then come up with a plan to pay it off. I would recommend to start with the smallest debt and work your way up into paying off the larger debt. Buying a home is a huge expense especially having a mortgage loan.
If you feel the need to use a credit card because you can't financially keep up with your expenses then it is probably not the best time to buy a home.
2.) Save for the Down Payment and Secure an Emergency Fund
A down payment on a new home will be one of the largest up-front expenses you will have to make. The minimum down payment that is required on a home is 3.5%. I recommend paying as much percentage down as you can, enough to decrease the amount of years the home will be financed for. Figure out the percentage that best works for you in accordance to the amount of years you plan on financing for.
Remember to always keep extra money on hand for any unexpected expenses that you may face.
There might be a costly repair or an unexpected life hardship that may refrain you from being able to make a payment. Having that security cushion will provide you financial security in the process.
3.) Figure Out What You Can Afford?
The last step in the process if figuring our the price range that works for you! There are lots of factors to consider in this process other than the price of the home. Consider: Property taxes, insurance, water/sewage/garbage, Homeowner Association fees, etc!
I recommend not going above the 28% threshold of the total household income including taxes and other miscellaneous fees.