Should I buy a house?
That is the question that often comes up as renters approach the end of their lease term. You may find yourself anxious over the decision of renting again or jumping in as a first-time homebuyer. For some, it’s something they have never really considered while others have been dreaming about their first home since Elementary School. No matter which end of the spectrum you find yourself in, the reality is, there is a substantial amount of information to consider when thinking about investing in a permanent residence.
The core question that many prospective homebuyers ask is, “Can I afford a home?” or “How much house can I afford?” It is very wise to ask this question before over-extending yourself or your family financially.
Partnering with a qualified loan officer and mortgage company with a reputation for strong customer service can help you discover if you are eligible to purchase a home. The truth is, many Americans can secure a home that fits their budget. A great mortgage company will educate you on available loan programs, the process to get pre-qualified and possible savings – all to assist you on the road to first-time homeownership. If you’re serious about taking the leap to own your own home there are some pro-tips to help ease the process.
First, if you’re planning to secure a mortgage loan, hit pause on applying for any new credit. That means car notes, student loans, credit cards and even co-signing on a cell phone plan. Applying for credit can affect your overall score, which has an impact on your interest rate. The lower the interest rate, the more affordable your dream home becomes. After that, get serious about saving. Cut the coffee runs or skip a few lunches out per week and increase your down payment fund. It’s also always fun to have a little nest egg to decorate the place and make it your own.
Sometimes first-time homebuyers can find themselves in a predicament where they have spent all their cash and are tight on funds for decorating or new furniture to fit the floor plan or style of the home.
Bottom line: Get a solid mortgage company in your corner and buckle down on shopping and eating out. It is worth it at the end of the process.
Season of Life
A prospective buyer should consider how long they are planning to stay in the home. The decision is impacted by family size, career goals, and the location of the home. Will your first-year house be a 3-5 year place with an owner’s suite, guest bedroom, and office? Will it be a 10-15 year home with a yard, 2 car garage, and extra rooms for kids or aging parents? Is your pace of life conducive to a revitalized urban development in the heart of a city or are you looking for a suburban community with great schools, activities, and local parks? Spend some time considering what kind of return on the investment of a home you’re looking for. This will help you determine if buying is in the near future.
“The Joys of Homeownership”
You may have heard this sarcastic phrase before and now are wondering if you are up for the task of being on the hook for repairs, minor or major. Many first-time homebuyers settle this fear by purchasing a home warranty or asking the sellers for one in the offer conversation. A home warranty can pick up what homeowners insurance leaves off. While insurance covers big things like a roof collapse or fires, a home warranty can cover appliances, leaks, and much more. This safety net can ease the anxiety about signing your life away and then realizing it’s like Tom Hanks and The Money Pit.
But really, why am I still renting?
This is where the discussion lands. Does your financial situation allow for a home? Is your season of life somewhat predictable for at least the next two years? Are you open to supplemental insurance for homeownership? If you answered yes to the questions above, why are you still renting?