If you are in the stage of life of buying a house and you feel a bit insecure, you will be interested in knowing 8 questions that may guide you to make the best decision, since many emotions can arise with the idea of having a home of your own, but you should not leave aside a study and analysis to really know if you are ready to have your own home.
It is normal to reach this stage and feel that you still do not feel ready to own a home, it is always vital to take the time to think step by step about everything you need to start this process. On this occasion, we will give 8 questions that you can ask yourself to answer “that” very important question: Am I ready to buy a home?
1. Do you have money for a down payment?
Although many have told you at the time that for those who buy a house for the first time, they must have 20% of the money insurance for a deposit, that isn’t true. Usually, you need a minimum of 3.5% to 10% for a home loan; and a minimum of 3% to 5% for a conventional loan.
It is important to remember that the higher your down payment, the lower your monthly payments and very little interest will be paid by you over the life of your loan. Another drawback to remember with low deposits is that you will have to pay for private mortgage insurance; as this protects the lender in the event that you are unable to pay your mortgage. If you put less than 20%, you will likely have to pay your private mortgage insurance, which is added to your monthly mortgage payment.
2. Have solid and emergency savings?
While you may be thinking about that deposit money, you also need to think about funds for emergencies, taxes, loans, mortgages, and more. Also, during your home inspection, you may find some home maintenance that you want to decide to do sooner or later, all according to how you like it; For example, covering cracks, painting walls, taking care for no leaks in water pipes or other details.
You should also make sure you have secured emergency funds; If you live in an apartment area or are renting a place, you should not worry, for example, that your washing machine will be damaged at some point, because there will always be responsible professionals who will help you in those cases; But once you become a property owner, everything changes, everything ends up being your responsibility, if your refrigerator stops working, you may have to look for other options in stores, or look for other professionals. So in this type of case, it is better to be sure that the money will reach, not only for main things, but also for emergencies.
3. Is your credit in good shape?
When we refer to this, we are talking about your income, whether it will be enough to cover everything that is owed. However, you don’t need perfect credit for this, since there are loans; but in many of these cases, the vast majority prefer not to borrow, so it is always common to choose to wait for a stable credit to make this decision. Clearly the options that banks offer us, facilitate the process to be done sooner than usual, however it does not always become so beneficial, for no one is a secret that it is a thousand times better to have what one wants, without the need to owe anyone.
4. If you have any debt, do you have control over it?
You don’t have to be completely debt free to buy a home; Among student loans, car payments, and others, many know and are aware that it is unrealistic for debtors to be completely debt free. What they are interested in is whether you will be able to pay off a loan or a mortgage, based on how much money you have and how your situation is in case you have other debts. For this, the lenders review your debt-to-income ratio, to see how your financial situation is with these other outstanding debts that you have. If your debts are not exaggerated and they consider that you will have a good control over this, without a doubt they will give you the loan that you request.
5. Have you already done the numbers to meet your monthly expenses?
To answer this question, you must spend your time with a calculator in hand, to understand if this is possible. When buying a home, the following responsibilities always come with it:
- Property taxes and insurance.
- Utilities.
- House expenses (food, water, electricity, internet).
- Rates and even more.
Before making the decision to buy a home, you must go through this process, which can be tedious and exhausting; but this way you will know if you are ready to buy a home. And you do not necessarily have to do it alone, if you are lucky enough to have a relative or a contact with a good handling of numbers, you can ask for their proper help to be able to have this process done on time and see if your decision is easier to take.
6. Do you have a stable job?
This is undoubtedly one of the most important questions and at the same time an essential requirement. A rule that everyone should know is that absolutely nothing is given away; and therefore you must work to get things and when they talk about houses, this is more than clear. When one refers to a stable job, we also mean that you are secure in your position, neither that it is a part-time position, an internship, or something more temporary; When it comes to buying a house you must be sure that you will have enough income to sustain that home for a long time, otherwise you will have to evaluate your situation and think about whether a house or an apartment will be better.
7. Do you need more space?
Always in this type of subject, these factors apply. When buying a house, you should always think carefully about whether I need a lot of space or very little, also depending on the following: If you will live alone, if you have a family, if my work demands a large or small space. All these details must be thought in advance and in the same way, you must be responsible with the money you save or handle for the occasion. There are many people, who love to live alone in very large spaces, as well as those who decide to reason with respect to their economic situation and buy what is considered necessary.
8. Are you planning to stay for a while?
We should always evaluate the situation and even think about the amount of time you’ll spend in the place. For many it does not make much sense to buy something big enough if they are gonna stay for few months; In general, the temporary is always associated with apartments or smaller or rental houses, but if you really want to buy a larger house, it is not only because it is needed, but also because it will be used for a long time.
