You are thinking about purchasing your first home. Before making this long-term commitment, ask yourself these six questions:
1. Why do you want to buy a home?
What will the home’s purpose be? Are you planning on living there or renting it? What will your housing needs be for the next five to 10 years?
2. What can I afford?
Before looking at homes, it is best to know what you can afford to buy. Your mortgage loan consultant will look at your income, expenses, assets, debts and savings to determine what you are qualified to purchase.
3. Other expenses?
Yes, there will be other expenses with your home purchase, including a down payment, insurance, property taxes, closing fees, etc… Your real estate agent and mortgage loan consultant will review these expenses with you.
4. What kind of mortgage loans are available?
Talk to your mortgage loan consultant. There are different loan products for various needs. Lenders review credit history, employment and tax returns to determine if they will offer you a mortgage loan. You need to have your finances in order before taking on the financial commitment of home ownership.
5. What is going on in your life?
Buying a home is major decision. Your home purchase should be a long-term investment. If you feel that you will be moving on in the near future, a home purchase may not be the best investment for your money at this time. As a rule of thumb, you need to be willing to stay in your home for a minimum of five years.
6. Where to live?
Depending upon your lifestyle, you may want an urban, suburban or rural setting for where you live. Are nearby highways important or is being close to your job or your friends and family a priority? Is it important to have a walkable neighborhood?