Thinking about buying a house?
Wondering if it's the right time to do it?
Buying a house can be a complicated process and it can be hard to decide when the time is right. There are a lot of factors that come into play and you need to be sure you've thought about every aspect of it thoroughly before rushing into a decision.
If you're asking yourself, "Am I ready to buy a house?", then look no further. Below we'll tell you everything you need to know if it's your first time buying a home.
1. Your Financial Situation Matters
The first thing you need to know when buying your first home is exactly where you stand financially.
You need to think about how much you can afford and create an accurate picture of how much you could spend on a downpayment, a mortgage, and the other costs associated with buying your home. Additionally, you should also know where you and your spouse's credit score stands and what it may mean for your chances of getting a home.
By being fully aware and realistic with your finances you'll know whether or not you're ready to buy a home. If you're not financially ready, you may want to wait until you know you'll have enough money to cover your expenses.
2. Find Out About Your Financing Options
Once you know your overall financial situation you also need to find out what your options will be for financing a home. It's a great idea to get pre-approved by a lender like Fortune Credit before you go shopping for a new home and to have a list of lenders that may be an option.
Additionally, don't forget that you need to maintain your credit score. Your credit score will help determine what type of lender you're able to work with. Additionally, you'll probably want to refrain from getting a new credit card or making changes that may affect your score if you plan on buying a home.
If you're unable to get good financing options or a good rate on your mortgage you may want to wait to buy a home until you're better equipped to find a great lender.
3. Know What Costs to Expect
If you're considering buying a home, it's important that you get completely clear about exactly what the costs will be.
In addition to the price of the home itself, be sure to know what you can expect from utility bills, renovations, repairs, and other expenses. You'll have to deal with many other expenses besides the mortgage and this will usually include insurance, HOA fees, property taxes, among other costs.
Do the math and determine how much you'll really need to pay to buy and own a home. For example, you'll likely want to get a home insurance estimate so you can know exactly what to expect.
Have a clear idea of what to expect before going in. If you're not prepared for all of the extra costs associated with getting the home you may want to wait on purchasing.
4. Understand How HOAs Work
If there is going to be a homeowners association (HOA) membership with a home that you're buying, you need to make sure you know exactly what that means for you and what the costs are. Be sure to know how HOAs work before thinking about buying a home and know whether you're willing to get a home that requires an HOA membership or not.
Condos will have an HOA as will some homes that you will choose. Joining the HOA will be a requirement if you want to buy a home in a neighborhood that belongs to one.
Unfortunately, HOAs are hit or miss and while they have positive qualities, some can create headaches for homeowners. Make sure you know what to expect from any specific HOA by asking current residents what they have experienced and think carefully about whether joining an HOA would be right for you.
5. Decide on Your Preferences
You should also know exactly what your preferences are when buying a home. You should be clear with yourself and with your spouse about what you're looking for.
It's a good idea to make a list of your requirements in a home and what may be negotiable. Decide whether you want a condo or a house, how many bedrooms you need, what type of neighborhood you want to live in, and so on.
A house is a big purchase and you won't be able to make a change on a whim. It will take time if you want to sell it if you decide to later on. If you and your spouse can't come to a consensus on the kind of home you want or where you want to live you may want to wait a while before making a purchase.
6. Check Out a Home Thoroughly
When it's time for you to buy a home, you need to know what to look for to make sure it's in great condition.
You should make sure that renovations are up to code and that it is free from mold and asbestos. You should also check for plumbing or electrical issues.
To check out a specific home thoroughly, you'll want to hire a great home inspector. Look for a home inspector with a great reputation and that you'll be able to trust. Ask your family and friends for suggestions or ask your real estate agent if they have any suggestions.
Getting a thorough inspection of a home is essential for making sure you don't regret your purchase decision later and that you don't pay more for the house than it's worth.
7. Know the Closing Process
It's also important to have a clear understanding of the home closing process before you make an offer on a home.
The closing process can take some time, so make sure you're ready for some back and forth with the homeowner before finalizing the purchase. Often you'll make an offer on the home and then the seller will counter it. This may go on for a while before you agree on a price. Additionally, if you're unlucky you may also find yourself becoming a part of a bidding war.
Be sure to look up some of the standards practices of the closing process and some tactics you can use before you decide to buy a home. This way, you'll be able to go into it knowing exactly what to expect.
Am I Ready to Buy a House?
By now you should know everything you need to know to answer the question, "Am I ready to buy a house?" Buying a home is not a decision to take lightly and may be one of the biggest purchases you make in your life. Make sure that you consider all of the above aspects thoroughly before you decide if buying a house is right for you.