Homeownership is a major step in one’s life, making sure that now’s the time for you is important. If you’re serious about transitioning from renting to owning we’ve compiled a list of criteria that may reaffirm your decision.
Plan to Stay Put for the Next Three to Five Years
The number of upfront costs and effort becomes undesirable if you plan to relocate within a year or two. Worst case, you may end up needing to sell your home for less than what you paid for.
Have Enough Cash Saved Up for the Down Payment and Closing Costs
When preparing yourself to buy your first home, there are three primary costs to expect: down payment, closing costs, and the mortgage itself. The standard down payment is 20% and the usual closing costs total around 2%-3%, depending on the state and other miscellaneous factors. There are however loan programs with less down needed that can help you get into your first home sooner.
Have a Solid Credit History
You’ll need a clean credit history to obtain a mortgage with good terms. Order your credit report and resolve any errors you come across.
Create A Budget That Can Handle Ongoing Costs of Home Ownership
One of the first things you should do when deciding to buy your first home is to create a budget and see if it’s feasible to own a home. After deducting your regular and occasional costs from your net income, compare the remainder to your expected house costs. These costs will consist of your mortgage, homeowner’s insurance, maintenance, property taxes, utilities, decorating, and furniture.
Devoting a Chunk of Your Life to Home Maintenance, Repairs, and Improvements is Required
If you enjoy using tools or completing optional improvements around the house, this may not be a deterrent for you. However, if you desire a hands-off approach to maintenance you can save valuable weekend time though some supervision of contractors may be needed.
Have an Idea of How Much Houses Really Cost in the Area You Plan to Buy In
Research what houses actually sold for in the areas you’re looking to buy. This is when contacting your local Neighborhood Expert is advantageous because they can help you obtain property information. Visiting open houses is also beneficial because you can compare what’s available at what prices and how different amenities affect the list price.