NewBuyer Blog

Are you Ready to Buy a Home?

Posted by Elizabeth Dennis on June 21, 2010 | No Comments

There is a great chance that buying a home will be the largest item you will purchase within your lifetime.  It is extremely important to consider the matter carefully before making the decision to become a homeowner.  Ask yourself these questions:

• Do you take in enough income to cover the cost of owning a home?
  It is not just the monthly payments you need to consider.  The other costs involved with the purchase of a home include:
  • Origination fee
  • Inspection fees
  • Survey
  • Appraisal
  • Credit report fee
  • Tax services fees
  • Attorney’s fees
  • Title insurance
  • Homeowners insurance
  • Taxes

In addition to the closing costs above, think about what you might spend to fix up the home and yard after you move in.

• Is your credit history in good enough shape to allow you to get a mortgage? These days it can be especially difficult to get a mortgage with bad credit.  Obtain a free credit report immediately, review it carefully, and clear up any problems before you begin the mortgage application process.
• Do you have enough cash to cover the down payment on the home as well as the closing costs we discussed above?
  Ideally, you will want to put down as much as 20% of the purchase price for the home.  While, some buyers can get away with putting down less, often times the mortgage fees and higher interest rates that come along with a low down payment will outweigh the benefits.
• Are you mature enough to take on the responsibility of owning your own home?
  As exciting as it can be to move into your own place, you will also be your own landlord and will need to take care of your own repairs and maintenance, or find the money to hire somebody to take care of them for you.
• How long do you plan to stay in your new home?
  A good rule of thumb is to not buy a home if you plan to live there for less than two years.   There are very few areas that appreciate fast enough to cover the fees that are involved in the purchase of the house.

By answering these questions honestly and thoroughly, you’ll know if you are truly ready to buy your first house.