Anne Spry's Blog
Buying a home may seem like a smart financial move. However, it may not always be the right time or the right move for you. While buying a home is a great investment, you may not be ready to buy a home of your own. The following questions should help you to determine whether or not you are fully ready to buy a house in the near future.
How Much Money Do You Make? How Much Have You Saved?
buying a home is a significant expense. First, you’ll need quite a large sum of money for a downpayment and closing costs on the home. Second, to get approved for a mortgage, the lender will look at every part of your finances from your income to your assets. Once the home is purchased, you’ll also need quite a bit of capital for expenses including insurance, taxes, HOA fees, emergency funds, utilities, and furniture. You don’t want to buy a home only to be overwhelmed with costs. You want enough of a financial cushion to enable you to furnish your home, decorate your home, and not have a completely empty bank account. That’s why you should make sure that you do make enough money to buy a home.
How Much Debt Do You Have?
If you have established that your income is enough to buy a home, the next thing that you need to establish is that your debt isn’t too high. Before you enter into the adventure of homeownership, you’ll need to make sure that your bills are under control. These expenses include things like car loans, student loans, and credit card bills. Your lender will put your debt into consideration as a part of your entire financial picture. Your debt (including your proposed mortgage payment) should be less than around 36% of your gross income. Before you take the leap into buying a home, you’ll need to make sure that your debt is under control. If you need to take a step back and pay your bills down before you start house hunting, you should as it will make buying a home easier for you.
Are You Seasoned At Your Job?
In order to secure a mortgage for a home, you’ll need to show that you have been at the same job for a certain period of time. Your average income will probably be calculated based on how long you have been at the company and your job history. You should be able to explain any income gaps, changes in positions or companies. Otherwise, you’ll appear to be an unstable person to lend to. Lenders want to know that you’ll have a steady, stable income.
How Is Your Credit?
In order to secure a mortgage, you’ll need to have a good credit score. Check on your credit report when you begin thinking about buying a home. If your credit is on the low side, you’ll want to work on bringing that score up.
Finding the house of your dreams is a process that requires a lot of clarity, diligence, and patience. While it is possible for the first house you look at to be the ideal choice, it's a lot more likely you'll have to look at a dozen or more houses before finding the one that matches your requirements and feels like home.
Whether you're searching for your first home or your tenth, your decision will primarily be based on four factors: affordability, practicality, emotional appeal, and prevailing market conditions.
Affordability is a vital element in the mix because it's difficult to enjoy a beautiful new home if you're always stressed out about whether you'll be able to make the next mortgage payment! Developing a realistic and well thought-out budget is one of the first preliminary steps involved in launching a full-fledged search for your next home. In addition to being able to cover your current expenses and the cost of mortgage payments, you'll also want to ensure that there's a cushion in your budget for things like home maintenance, repairs, improvements, HOA fees (if applicable), property taxes, school taxes, and homeowner's insurance.
As far as practicality goes, your new home should -- at the very least -- live up to your basic needs and expectations. Ideally, all systems should work properly and be in good condition. Proximity to key locations, such as your job, shopping, and essential services can also have a direct impact on your quality of life. Long commutes, cramped quarters, or being buried by an avalanche of repair bills can definitely take some of the pleasure out of home ownership!
The majority of houses you'll look at will probably need some degree of updating, decorating, or repairs, but ideally, you'll want to tackle those projects over the next couple of years, rather than the immediate future! Having an experienced home inspector do a thorough inspection of the home you're interested in will help ensure you're not buying a home riddled with flaws, headaches waiting to happen, and other problems.
Although cost and practicality are vital aspects of buying a new home, you can't (and wouldn't want to) ignore factors such as aesthetics and emotional appeal. If you can't imagine you and your family living in and enjoying a house you're considering buying, it might be time to continue your search elsewhere! The house you ultimately choose should support your lifestyle, provide sufficient space for your family to grow and thrive, and be situated in a neighborhood in which you feel comfortable and safe.
To make the most of your available time and money, find an experienced real estate agent who's responsive to your needs and knowledgeable about the local real estate market. They will help you streamline your search, find houses that meet your criteria and negotiate the best possible price on your behalf.
Before you embark on a search for your dream house, it helps to know what to expect during the homebuying journey. If you understand the true cost of purchasing a home, you can map out your property buying strategy accordingly.
Now, let's take a look at three factors that may impact how much you spend to acquire your ideal residence.
1. The Price of a Home
The initial asking price for a house is not necessarily set in stone. In some instances, you may be able to negotiate with a seller and receive a lower price.
However, regardless of the price you negotiate with a seller, you are responsible for paying for a residence. And if you fail to receive a mortgage, you may struggle to make your homeownership dream come true.
It often helps to get pre-approved for a mortgage. That way, you can enter the housing market with a budget in hand. Pre-approval for a mortgage also may enable you to speed up your home search and ensure you can quickly discover a residence that falls within your price range.
2. Closing Costs and Other Homebuying Fees
After a seller accepts your offer to purchase his or her home, there may be various fees that you'll need to pay to finalize your house purchase.
For instance, a buyer who conducts a home inspection will need to pay for this evaluation. He or she likely will need to pay for an appraisal and any closing costs as well.
As you get ready to pursue a house, you may want to put aside extra funds for any potential costs you may encounter throughout the homebuying cycle. Because if you have the necessary funds at your disposal, you may be better equipped than ever before to seamlessly navigate the homebuying journey.
3. Moving Expenses
After you buy a home, you will need to relocate all of your belongings to your new address. To do so, you probably will require moving boxes and packing supplies to ensure your personal belongings can safely reach your new house. As such, you should account for these expenses prior to starting a house search.
Of course, you may want to hire a moving company too. If you want to find out what it costs to hire professional movers, you may want to receive quotes from multiple local moving companies sooner rather than later.
If you need help getting ready to search for a home, a real estate agent is happy to assist you. A real estate agent can offer lots of insights into the potential costs you may encounter at each stage of the property buying journey. In addition, a real estate agent will help you narrow your search for your dream house, conduct home showings and much more.
Start planning for potential costs associated with the homebuying journey – you'll be glad you did. If you budget for the property buying journey, you could increase the likelihood of enjoying a quick, stress-free homebuying experience.
If you intend to buy a house, you probably will check out a lot of home listings over the next few days and weeks. However, it is important to note that not all home listings are created equal, and how you analyze home listings may dictate your homebuying success.
Ultimately, there are several factors that homebuyers need to consider as they assess home listings, and these factors include:
The price of a home is one of the key factors – if not the most important factor – that a homebuyer needs to consider in a home listing. Because if you ignore a home's price, you risk wasting precious time and resources as you pursue a home that falls outside your price range.
When it comes to buying a home, it pays to develop a budget ahead of time. That way, you'll know how much you can spend on a residence and can tailor your home search to fit your budget.
You may want to get pre-approved for a mortgage prior to looking at home listings as well. By doing so, you can enter the housing market with a budget in hand and explore available residences that won't force you to spend beyond your means.
Are you looking for a fixer-upper or a brand-new residence? Take a look at a home's condition, and you can determine whether a particular residence is right for you.
Oftentimes, a decades-old residence may require myriad upgrades. This means you may need to allocate significant time and resources to enhance the condition of an old house after you finalize your home purchase.
On the other hand, it is essential to remember that a new house may prove to be more expensive than an old residence. And if you're on the lookout for a bargain, you may want to shy away from listings for brand-new houses.
Creating a list of must-have home features is ideal, as this will enable you to narrow your search for your dream residence.
For instance, if you want a home that has a big swimming pool, you can browse home listings accordingly. Or, if you would like to buy a house that is located near some of the nation's best schools, you can focus on home listings in cities and towns that feature top-rated schools.
If you want to streamline your home search, it usually helps to look beyond home listings. Fortunately, real estate agents are available to help you accelerate your search for the perfect residence.
A real estate agent understands the ins and outs of the housing market. He or she will learn about your homebuying goals and provide you with the latest home listings. Then, a real estate agent will work with you to simplify your home search and ensure that you can discover a terrific residence at an unbeatable price.
Take the guesswork out of reviewing home listings – use the aforementioned tips, and you can quickly evaluate a wide range of home listings and find your dream house.
If you're ready to pursue your dream house, it generally is a good idea to enter the real estate sector with an open mind. In fact, there are many benefits to keeping your options open as you search for your ideal residence, and these benefits include:
1. You may be able to discover a bargain.
As you kick off your home search, it helps to pursue houses in a wide range of cities and towns. Doing so can help you separate your dream home must-haves from your wants. Also, this may enable you to find an affordable residence that matches or exceeds your expectations.
There is no telling whether a real estate market will favor buyers or sellers. The housing sector fluctuates constantly, and a buyer's market today may morph into a seller's market tomorrow.
Luckily, if you maintain an open approach to buying a house, you can remain patient as you search for your perfect residence. Perhaps most important, you can capitalize on homebuying opportunities as they become available and avoid the temptation to overspend on a house.
2. You can move quickly to acquire your dream residence.
With an open approach to the homebuying journey, you should have no trouble moving quickly to acquire your ideal residence. If the opportunity presents itself to buy a great house at a terrific price, you can submit an offer and proceed accordingly.
Of course, you should always think ahead before you submit an offer on any house, at any time. If you put together a competitive offer on a residence, you may receive an instant "Yes" from a home seller. Then, you can seamlessly finalize your home purchase and move into your dream residence.
3. You can minimize stress throughout the homebuying journey.
Buying a home is a major decision, and as such, stress can be problematic throughout the homebuying journey. If you are open to new ideas as you pursue a home, however, you may be better equipped than ever before to purchase your perfect residence.
Remember, stress may force a homebuyer to make rash decisions – something that a homebuyer probably wants to avoid at all costs. But if you're willing to take a deep breath and step back from the homebuying cycle at times, you can look at the big picture. And as a result, you can remain calm, cool and collected as you consider all of your homebuying options.
For those who are looking for extra help in their pursuit of the perfect home, it may be beneficial to hire a real estate agent too. This housing market professional can share details about a broad array of houses in cities and towns where you want to live. Plus, a real estate agent can keep you informed about new residences as they become available, help you submit offers on houses and much more.
Make your homeownership dream come true – take an open approach to the homebuying journey, and you may be able to accomplish your homebuying goal faster than ever before.