There comes a time when buying a home becomes more practical then continuing to rent. Right now the market is at a point where renting is actually more expensive monthly than buying. Renting has a few benefits that buying doesn’t but instead that if you are interested in buying a home now is a great time to enter the market. Here are five questions to ask yourself when narrowing down your homeownership goals:
What type of home situation best meets your needs?
There are a variety of residential home styles to choose from when you are looking to purchase. Consider all of your options including: traditional style single family homes, duplexes, townhouses, condominiums, co-op’s and multi-family buildings. There are pros and cons of each and depending on your homeownership goals at the moment will help establish the style of home you should focus on finding.
What are must have features you are looking to have in a home?
When buying a home there are certain features that are must-haves, some that would be nice and some that are downright unnecessary but would be a dream. Create your own list and make sure that it offers a bit of flexibility. You deserve a home that offers you exactly what you want!
What type of mortgages do you qualify for?
Before you hire a realtor meet with a mortgage broker to determine how much you can pre-qualify for and what types of mortgage options are available for your current situation. Knowing how much a lender will lend will give you a starting point on the price range of homes you should be focusing in on. Before you begin searching for a mortgage or home get your personal finances in order. Make sure your credit is in order, you have a solid history of paying your bills on time, substantial savings and a maximum debt to income ratio of no more than thirty six to forty three percent.
What amount can you afford to take on monthly?
Another thing to consider after finding out how much a lender will lend is how much you actually feel comfortable paying each month. Consider the amount of the mortgage, interest, insurance along with utilities and other monthly bills you have. You will want to be comfortable with the amount that you will be spending each month. The last thing you want is to be house poor without any money to spare each month.
What does your savings account look like?
In order to purchase a home it is important to have a down payment, closing costs and money for the incidentals that will arise after you move in. Take time to build up a substantial savings before you get serious about looking to find a home of your dreams.