How to Know if You Are Ready to Buy Your First Home
Buying your own home is a huge step to take, and one that many look to with both excitement and a bit of fear. Let's face it, it's one of the biggest financial decisions you will make in your life. You may be wondering how you know when you're ready to take that plunge. Your Atlanta mortgage broker can give you a hand with finding out if you're ready or not. There are a few questions that you need to ask your self before you take that next step into home ownership.
It's About Who You Are
An Atlanta mortgage broker explained that it isn't about when you are ready. It's about who you are and where you are at in your life. Not everyone is ready to buy a home in their early 20's. Some may not own their first home until they hit 40. There are some things to ask yourself to see if you are ready.
Are Your Finances in Order?
Before buying a home, you need to make sure that your finances are in order. Do you have a lot of debt already, for example, credit cards or other loans? Debt can be the symptom of a larger issue, which is that you don't have enough money. If you are forced to continuously use credit cards or take loans because you are short on funds at the end of each month, buying a home is probably not the best idea. Your credit score is also important because it tells lenders how well you are handling your credit. If you have a bad credit score, its best to clean this up before buying a home.
The biggest investment when buying a home is the down payment, including those unforeseen costs associated with buying a home. You may have $10,000 saved for the needed down payment, but many new home buyers forget to put more aside for other costs, like taxes, insurance, repairs, closing fees, and the things you need to make your new home liveable. So, make sure you have enough saved to give you that flexibility to cover after purchase expenses.
When thinking about buying a home, you need to carefully consider whether you can afford the monthly expenses that go with it, not just the monthly mortgage payment. You also have to account for insurance, property tax, utilities, any homeowners association fees, and so on. To see what you can realistically afford to pay each month it's advisable to talk to your Atlanta mortgage broker, who can help you figure out all of the monthly costs. It is also advisable to not take out a monthly mortgage payment that is over 25% of what your take-home pay is.
Is It the Right Time to Settle Down?
A new home is a long term investment. If you only plan on staying there for a year or so, you may find that the value of the home doesn't even cover your closing costs when it comes time to sell. So, unless you are in the job of buying and flipping homes, you should only consider buying a home if you are planning to settle for some time. If you are going to be moving around or going from job to job, it's probably not the best time to be buying a new home. One Atlanta mortgage broker advises that, if you aren't ready to commit to staying in a home for at least 5 years, you probably aren't ready to buy one.