How to know if I’m ready to purchase a house? Here are 3 questions that will assist me to determine if homeownership is the correct decision for me.
Purchasing a house for the first time is a huge commitment for everyone. Homeownership is the biggest financial decision most people will ever make. There are plenty of determinants to consider, but am I really ready to purchase a house?
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To Purchase A House is Good For Me Right Now?
I look at the questions I need to ask myself so I can better understand if I’m are ready to purchase a house.
Do I Have Enough Money for a Down Payment?
While there are some government plans that allow a 0% down payment, this won’t go for the case for most house purchases. And the more money I have for a down payment, the better terms I will get on the mortgage.
Ideally, a 20% down payment will get me the exceptional interest rates and lesser fees, but I don’t generally need to search that amount to purchase. Depending on the kind of mortgage I am searching for, I could afford to purchase a home with only 3% and 5% of the purchase price saved for the down payment.
With FHA loans, I’ll need 3.5% as a down payment at least. Though the more I can pay upfront as a down payment, the low interest there is to pay. With a 20% down payment, I can avoid paying private mortgage insurance on the loan.
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How Strong is My Credit Score?
If I intend to purchase a home, my credit score will surely matter. However, if I don’t have the strongest credit score in the world, I would still be able to qualify for a mortgage.
Even if my credit score is around 600 I could still get a loan to purchase a home.
However, before I begin looking for a loan, it is an appreciable idea to do everything I can to improve my credit score. With a greater credit score, I will find it smoother to get a mortgage, and the terms of the loan will be better.
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Is My House Big Enough?
Space is a substantial factor, and if I can’t afford to purchase a home that meets my criteria, needs, perhaps It will be better to wait.
Are You Ready to purchase a house?
If after going through my questions you still aren’t entirely sure if I’m ready to purchase a home, I can always check the financial aspects with my potential lender. A real estate broker can assist with more suggestions if I still have concerns.
One last factor to ponder on and keep in mind, I will have to pay for housing whether I opt to purchase or continue to rent. Sometimes it’s more cost-effective to purchase a home. So even if I don’t feel like I’m ready to purchase a house it might be an outstanding move, which is why both options should be weighed and investigated.
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