The idea of buying a home can seem overwhelming at first. But breaking down the process into smaller steps allows you to analyze each part of the process separately in order to determine if home ownership is right for you. For some people owning a home can cost the same as or even less than renting a home. These four questions will take you through the necessary questions to ask before you begin the home buying process.
1. What do you want? Would you like to live in a new neighborhood, an established neighborhood or maybe on acreage with less of the neighborhood appeal. A house, an apartment or a condo? What is the location you would like to own a house in? What would you like in terms of real estate that you do not have now? How would your life and your family’s life be impacted by the purchase of a home?
2. What lifecycle stage are you currently in? If you are raising a family, school district ratings are something you will want to research. Or maybe all the kids have gone off to college and you are looking for a place to kick back and relax? Or, are you a young professional looking for fun and lively place to live within your means. Whatever your situation may be, evaluate where you are and what you want and communicate this to your realtor when you begin your home searching.
3. Do you have the money? Do you have the funds to finance the home of your choice? What is your maximum house purchase point? How much can you realistically afford per month for your mortgage or home loan payment? How do you expect your finances to change in the future? Take the time to establish a home buying budget. Look at the monthly cost of home ownership, including mortgages and taxes, in your areas of interest. Check out our home loan payment calculator here to help you get started. The term financing means the difference between the purchase price and the down payment, otherwise known as the debt you owe or your mortgage. In addition to a down payment, a home buyer will also need cash to cover any closing costs, which are the fees associated with actually closing the home loan, and any moving expenses you might incur.
4. How does your credit score and credit report shape up? For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check , car payment and any other debt or payment are paid in full and on time. Check out “How to Get and Keep a Good Credit Score” for more tips.
