Owning a home is an exciting milestone. It’s one of the most gratifying investments you will make in your lifetime. With all that said, it’s not nearly as much fun if you’re not fully prepared for everything that goes into homeownership. Things like unexpected costs or a job change can make homeownership difficult if you’re not truly ready.
You might be asking yourself, “Am I ready to buy a home?” BestMichiganHouses.com understands how important buying a home is. We also understand how you might hesitate to take those first steps. Are you on the fence about whether or not you’re ready for homeownership? Start by asking the questions below.
Questions to Ask Yourself if You Think You’re Ready to Buy a Home
Are my finances in order?
While lenders look at a variety of factors like income and debt when making mortgage decisions, your credit score is the biggest factor in determining whether you’ll qualify for a loan and what interest you’ll pay. Most lenders require a credit score of at least 620 to qualify.
In an ideal situation, you should also have at least 10% for your down payment. Even then, you’ll need to pay mortgage insurance (PMI). If possible, save 20% and avoid the PMI. You should also have savings and an emergency fund. Houses are expensive – more on that below.
Can I afford taxes?
Once your finances are in good shape, you can start looking into taxes. Create a hypothetical, conservative budget to see where you stand. If you know where you want to move, investigate local taxes and insurance rates. This might affect where you choose to look for a home.
What hidden expenses are there?
This is an area that is overlooked the most. From association fees to repair costs, there is a LOT that goes into owning a home. For good measure, add at least $100 to your monthly budget to pay for these unpredictable costs.
Do I plan on moving anytime soon?
Buying a house is an investment of money and time. It’s a good idea to stay at least three to five years after you buy a home. If you decide to go sooner, you could lose some serious money.
If you’re not sure of the issues that might affect this like job opportunities or the real estate market, it would be wise to do some research. Once you commit to a city and buy a home, you won’t want to relocate any time soon.
Is the housing market favoring buyers?
Although you hear about the “housing market” on the news, there are local fluctuations in real estate. If you plan on buying a home, talk to a local Realtor to get the inside scoop. For instance, some markets recovered much faster from the housing crisis than others. Every city is different.
The first step of the home buying process starts with asking the question “Am I ready to buy a home?”. If you’re still wondering if you’re ready for homeownership, Bittinger Team, REALTORS is happy to sit down and answer any additional questions you might have. We’ve been helping clients buy and sell homes in Plymouth, Canton, Northville and the surrounding Southeast Michigan communities, for over 35 years, so contact us today!
Looking for more answers to real estate questions? Check out our blogs for lots of insider information and home buying tips!