It’s important to consider many things when determining if you’re ready to buy a home.
By taking adequate time to evaluate your finances and to find the perfect time to buy, you can make sure that you have a successful and streamlined home-buying experience when you do contact a mortgage company.
Are you currently locked into a lease? If so, then you’ll know when the best time is for you to purchase a home (after the lease ends, of course). Because of this, don’t start looking at homes until near the end of your lease so that you don’t fall in love with a house that you can’t buy immediately, and you aren’t stuck paying large penalties in order to get out of your existing place early. Some landlords may allow a sub-lease but you should determine that before you start home-shopping.
If you have a lot of debt, it may not be the right time to buy a home. Remember a mortgage is a long-term debt and a big one at that, and if something happens to your income, you could possibly have to default on your loan or have your home foreclosed on. Take a close look at your finances and employment security to determine if you can confidently enter the home-buying process.
Affording a Fixed Mortgage
The advantage of a fixed-rate mortgage loan is that the borrower is protected from sudden increases in their monthly payments. An adjustable-rate mortgage from a mortgage lender, also known as an ARM, changes with the market. If you’re unsure of your income or have a large amount of debt, a fixed-rate mortgage is a necessity.
Maintenance and Other Costs
Remember that when you buy a home, in addition to your mortgage, you will also have payments for property taxes, insurance and maintenance expenses. This means that if the furnace breaks or a faucet leaks, you are responsible for the bills. All of these things can add up, so ensure that you have adequate savings on hand for unexpected expenses when determining whether you’re ready to buy a home.