Have you finally saved up enough money to buy a new home? There are eight things you need to be sure of first before making that huge decision. Three are written below, while the rest are posted on Forbes:
When I travel and speak at industry events, I connect with amazing folks, including investors, who want to become homeowners, but are afraid to. I feel some people put off buying a home simply because they are intimidated by the process that comes with real estate purchase. Becoming a new homeowner should be a source of pride, not something to fear. Here are eight answers that will help you get a handle on what to expect when buying a house.
Am I ready to be a homeowner?
If you think you are prepared to take the leap from renter to homeowner, then it is important to take a financial inventory of your lifestyle, debts and assets. Are you gainfully and reliably employed? Lenders look for those who will pay their loans payments on time, and consistent income is a must to qualify. Do you have enough money saved to put up a down payment? The down payment should be a minimum of five to 10 percent of the real estate property purchase price. Your credit score should be in at least fair to good shape and only contain a few outstanding debts that can be easily resolved. Your payment history should show a good record of payments being made on time.
Is renting or buying better?
Comparing buying and renting is no different than comparing apples to oranges. While they both have pros and cons, it simply comes down to what each person prefers when considering buying a house for sale. Renters have the advantage of management-provided maintenance and lawn care in most cases. When buying your own home, there is opportunity to build equity with the monthly payments, while also qualifying for tax incentives to help offset new homeowner expenses.
What is the lender’s formula?
The lender’s formula is a complex configuration of debt-to-income ratio, available credit and score, credit history and the amount of available cash for the down payment and closing costs, as well a few other numbers.
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