Figuring out if you are ready to buy a house — whether you’re a renter or you are aiming to move up or size down — can be a daunting task. But don’t despair, there are six easy questions that you can ask yourself that will indicate if you are ready to take the buying leap.
To begin with, ask yourself the question, “Am I familiar with the market?”
If you’ve been paying attention to how much houses are listed for in the neighborhoods you’re eyeing and have a realistic view of how much a house will cost you, you’re in good shape. But if you’re dreaming about that big corner house with no clue about it’s asking price, you may want to spend some more time becoming familiar with the market and how much houses are going for. You can accomplish this by simply calling /texting/or e-mailing me, Gisele Perez, with the GET Moving team, and requesting a current market analysis of homes you are interested in.
Next question, “Do I have the money for a down payment and closing costs?”
The down payment is a percentage of the value of the property, and the percentage will be determined by the type of mortgage you select. Down payments usually range from 3 to 20 percent of the property value. Also, you may be required to have Private Mortgage Insurance (PMI or MI) if your down payment is less than 20 percent. Closing costs include points, taxes, title insurance, financing costs and items that must be prepaid or escrowed and other settlement costs. You can expect to pay between from 2 to 7 percent of the property value. Generally, buyers will receive an estimate of these costs from your lender after you apply for a mortgage. If your head is reeling after all of this information, don’t get overwhelmed. Make it easier on yourself and contact Nick Maddock with Preferred Home Lending,
nmaddock@ph-lending.com. He will explain all of the costs in detail and help you to determine your financial situation.
“How Much Can I Afford”
Freddie Mac states that as a general guide, your monthly mortgage payment should be less than or equal to a percentage of your income, usually about a quarter of your gross monthly income. Also, your income, debt and credit history go into determining how much you can borrow. As a general rule, your debt -credit card bills, car loans, housing expenses, alimony and child support — should not be more than about 30 to 40 percent of your gross income. This is another questions that Nick Maddock would be happy to help you with.
“Is Your Credit in Good Shape and is Your Credit Report Accurate?”
Potential lenders will view your credit history — how much debt you’ve accrued, how many accounts you have open, whether your payments are made on time, etc. — to determine whether they’ll give you a loan. You should get a report from each of the three credit reporting companies: Equifax, Experian, and Trans Union to evaluate your report. Also, major purchases, particularly a vehicle, can have a significant effect on your credit report.
“What Additional Expenses Will Come With Owning My Home?”
This includes homeowners insurance, utility bills, maintenance costs — roofing, plumbing, heating and cooling. Be careful with this question, as the answer can change depending on what kind of home you buy. Don’t hesitate to contact me, Gisele Perez, when you are ready to answer this question.
Once you have determined your answers to all of these questions, you are ready to buy! But don’t be discouraged if you don’t have all of your answers. Now is the time to contact the team that will help you with your home purchase. The more time you spend with them shows your dedication to your cause, and will make your home buying experience smoother and more efficient. So, don’t hesitate to conact Gisele and the GET Moving Team today!
