Here are three questions you should ask yourself before purchasing a home.
Today, I’d like to address a common question: How do you determine if you’re ready to buy a home? If you’re contemplating this significant decision, your mind is likely buzzing with various considerations, from your financial situation and current mortgage rates to home prices and the limited supply of homes for sale.
Balancing these factors can be challenging, but it’s crucial to remember that while market conditions matter, your personal life and financial stability are even more critical. Rather than attempting to time the market, focus on what you can control. To help you gain clarity on your readiness to make a move, here are some important questions to consider:
1. Do you have stable employment? The stability of your job is a key factor. Purchasing a home is a substantial commitment, and signing a home loan obligates you to repay it. Having a dependable job and income can alleviate the pressure associated with this obligation. It’s advisable to wait until your employment is secure before pursuing homeownership.
“You should consult a trusted lender. ”
2. Have you determined your budget? Understanding what you can afford is essential. Identify your savings goals and get insights into your potential monthly expenses by consulting a trusted lender. They can guide you through the pre-approval process, share information on borrowing capacity, provide current mortgage rates, estimate monthly payments (including closing costs), and clarify the down payment required. Contrary to common misconceptions, a 20% down payment is not always necessary, as many mortgages accept 3% to 5% down payments. There are also assistance programs available to help cover these costs.
3. What’s your long-term plan? Consider how long you intend to reside in your prospective home. Building equity and realizing home price appreciation take time. If you plan to relocate soon, you may not recoup your investment. For example, if you anticipate moving within a year, it might be impractical to buy right away. Buying a home becomes a sound decision when you plan to stay for at least four years. In our area, home values typically appreciate by 3% to 4% annually. Selling after just a year or two could result in paying more in closing costs than earning in proceeds. Factor in future possibilities, such as potential job transfers or family needs.
Above all, ask yourself if you have a team of real estate professionals to assist you. At the Marriott Group, we can connect you with a trusted loan officer and guide you through the entire process. We’d be delighted to earn your business.
