So… You want to buy a house. Before diving into the market, be sure to ask yourself these five questions.
1. How much can you afford?
– It may be hard to figure out how much you really can afford. The very best ratio is to have one-fourth of your income go to house payments. You should know your financial situation before you approach a lender and borrow accordingly. A 30-year fixed mortgage is preferable.
2. What are my costs outside the loan?
– First timers tend to miscalculate the total tab for sealing the purchase and the cost of maintaining a home. Make sure that you consider down payment and closing costs, as well as all of the monthly charges. Finally, double check utilities and tax costs to avoid nasty surprises.
3. What do I need in a neighborhood?
– The way you live is key. Buyers should consider how they will get from their home to other places, such as work, school, restaurants, the gym, etc. Check out potential neighborhoods at different times of the day. Walk the neighborhood so you truly get a feel of where you may live.
4. Will this house fit my long-term goals?
– While you should make a decision based on your financial situation, you should also consider your future personal and work life. If you have kids, think about schools. Sometimes, paying more for a house can be cheaper in the long run. A pricier home in a better school district can be cheaper than a lower-priced home plus private school for 13 years.
5. Am I prepared to be a homeowner?
– Make sure you understand what is involved. You should ask yourself before buying if you have good spending habits. If you’re ready and buy responsibly, experts say buying a home can still be a wise financial move.
