Buying a home is a huge step — one that can lead you down the path to financial security. However, owning a home before you’re ready can be a step in the wrong direction. It’s not just about whether you can afford a home — ask yourself if you should and if you’re really ready for that level of responsibility. Here are a few questions to ask yourself before buying a home.
Are your finances in order?
Take into account your debts, whether you have credit card debt or debt from various types of loans. Remember that your credit score is what a bank will use to determine how much of a mortgage loan you’re eligible for. More than that, if you routinely find yourself with a lot of debt, it probably means you do not have the finances necessary to purchase a home. Clean up your debt first and get to a place where you’re more financially stable before taking on the responsibility of a mortgage payment.
Have you saved enough for a down payment?
Before you even consider looking for a home, you’ll need to need to have enough saved for both the down payment and the extra, sometimes unforeseen, costs. With the right qualifications, today you can buy a home for as little as 3.5% down. However, you’ll also need to have enough money to cover closing costs, insurance, taxes, and any necessary repairs. This could easily add up to thousands more than the down payment alone, so you need to be prepared.
Can you really afford the payment?
Can you really afford to pay all of the monthly expenses of owning a home? You may have been told you can own for the same price as renting. While the amount you pay in rent probably would be similar to the amount you would pay in principle and interest on your mortgage loan, however, there are other costs to consider. In addition to a monthly mortgage payment, you’ll have to pay property taxes, insurance, homeowner’s association fees, city assessments, water, sewer and/or garbage, and other utilities your landlord may currently be covering for you. Know your budget before you shop for a home and keep these costs in mind.
Are you ready to settle down?
Buying a home is a long-term investment. If you change your mind quickly and sell after only a few years, you’re losing money. Any increased value within the first few years likely won’t match the closing costs you paid for a home. Make sure you’re in a job you’re content to stay with for some time. You don’t want to buy a home only to change to a career that brings you to another city or state. A good rule of thumb is to be prepared to stay in your home for at least five years.
Can you fix a leak?
When you own a home, you can no longer rely on a landlord to fix sudden problems. You have to become self-reliant. If your sink begins to leak, or if your dishwasher breaks, you need to either be able to fix it yourself or have the resources to pay someone to fix it. If you can fix it yourself, of course, all the better – it’ll save you money in the long run.
Stonebridge Mortgage Group can advise you on your mortgage needs.
For professional assistance with mortgages, look no further than Stonebridge Mortgage Group. You can rely on Stonebridge Mortgage Group to help guide you through the home buying process. If you’re ready to apply for a loan and want to go through the process online, Stonebridge Mortgage Group offers online applications. We also help get you pre-approved for a mortgage and help with your real estate loans and other mortgage solutions, both residential and commercial. Stonebridge Mortgage Group serves the greater Portland area and are in Gresham, Oregon. Don’t wait to get quality assistance with buying your home!