Am I Ready to Buy a House?
Homeownership may be part of the American Dream, but that doesn’t mean it’s necessarily the right choice for everyone at any given time. How do you know whether you’re ready? You’re wondering about purchasing a home, so there are clearly financial hurdles that you need to be prepared for. However, owning a home doesn’t just impact your finances. It also affects your lifestyle. That means you need to consider whether you’re in the right place in your life to buy a home. In addition, you’ll want to think about whether you’re emotionally ready to buy a home. Asking these questions can help you decide if you’re ready.
Is Your Financial House in Order?
You don’t have to be a financial mastermind to buy a house, but you do have to have your financial house in order if you want to convince a mortgage lender that you can be trusted to repay a home loan. According to Redfin, you should keep the following in mind:
- Credit scores matter. Although there are exceptions, many loan programs set a minimum credit score.
- Income is required. A stable job history and steady income are necessities if you hope to persuade a lender that you’re an excellent candidate for a home loan.
- Debt must be manageable. Your debt-to-income ratio is a measure of how much of your income goes toward paying down your debts. A lower DTI is preferred.
- Down payments are a must. With a down payment, a homebuyer has some skin in the game. Keep in mind that the 20-percent down payment that is often discussed is certainly a nice goal, but it isn’t required.
- Savings are also needed. The down payment isn’t the only thing that you’ll need to save for. You’ll also need to have savings for all the other assorted costs that come with buying a home. There are closing costs and other odds and ends to deal with. Plus, you’ll need to fund your move to your new home, and you’ll likely want to furnish and settle into your new place. In addition, it’s wise to have an emergency fund.
- There are expenses beyond the mortgage payment. The costs of homeownership don’t stop when you purchase a home. Before you buy, you need to make sure that you’re prepared for the various monthly expenses that homeowners face. In addition to your monthly mortgage payments, these might include things like homeowners’ association dues, bills for utilities, and common expenses like internet, sewer, and garbage collection.
Is Buying the Best Fit for Your Lifestyle?
Do you prefer to keep your options open regarding where you hang your hat? Or, are you eager to put down roots? As Opendoor indicates, people who like to be ready to leap whenever there is a new opportunity are probably not ready to buy a home. That’s because both buying and selling a home involve certain costs, and you generally have to remain in the house for several years for buying a home to make financial sense. In fact, the conventional wisdom is that if you don’t plan to stay in a residence for at least five years, you should probably rent instead.
Do You Really Want to Be a Homeowner?
According to HomeLight, owning a home is a responsibility that can mean sacrificing time and resources. In return, you can get additional privacy, freedom, and stability. For some people, that’s a fair trade. Others are less appreciative. Only you can decide where you’d fit.
Am I ready to buy a house? If you’ve answered that question with a yes, the loan experts at PrimeLending West Texas can assist you. We offer a variety of loan products. Contact us today to get started.