Let’s break it down.
Owning your own home is the American Dream. These days, the market is hot and it seems like everyone is buying a home. Whether you think that you are in this investment for the long-run because you will be steady in your city for a while or you think you need to be zoned for a top-rated school because of your children, buying a home really boils down to can you afford it? Before you take the plunge and decide you are ready to buy a home, you need to ask yourself a few questions.
This one could be one of the most important questions. Whether it be your credit card bills or your loans, are you debt free? When buying a home, you will be spending a good chunk of change on a down payment along with monthly mortgage payments. You do not want other payments to be bogging you down because before you know it you will be in over your head. You also need to be able to qualify for a good deal on a mortgage. Having a good credit score is the only way to ensure that you get those low mortgage rates.
You NEED to have the down payment and closing costs saved. Do not go into the home buying process ready to only put 10% down or less. The sweet spot is 20% for numerous reasons. Putting down that much already give you equity within your home and it allows you to bypass private mortgage insurance.
Will you be in this area for a long period of time? Does your work require travel often? These are all questions you need to ask yourself. If you answered “yes”, than maybe re-think buying for the time being and stick to renting. You want to be in the home long enough to break-even on your initial costs.
You also need a pretty hefty cushion saved up. If something were to go wrong like you lost your job or your home needed a large repair, would you be able to afford that. You always need to have money saved so that you are expecting the unexpected and ready to take on the challenge. The recommended amount is to have about 6 months of your yearly income put to the side, so that if something happens you are prepared.
Take yourself through these questions and make sure you are ready. If not, stick with renting for now and focus on saving your money and getting your credit score up. Putting buying a home on hold for a year is nothing when it’s going to benefit you in the long run. If you are ready to make that leap of faith than do it! Buying a home is one of the smartest investments you can make. When you pay rent, that money is gone forever. When you pay your mortgage, every one of those payments brings you closer to owning your own home.
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Call us (407) 380-2800 or visit 1storlandorealestate.com