Life isn’t all about fashion (much to our ongoing dismay). You may aspire, for example, to someday own a fabulous home of your own—but before you can decide if this is the right time to shop for a house, you need to take a close look at your financial situation. Ask yourself these questions and you’ll know if this is the time to buy or the time to wait:
Should You Buy a Home
1. Do you have the money for a sizeable down payment? Most lenders like to see borrowers who can afford to make a down payment of twenty percent of the mortgage loan. There are other loan programs where you can get away with a lower down payment, but unless you are buying a house with no money down through a VA loan you’ll need to come up with something.
2. Do you have money saved up beyond your down payment? Dumping all your money into a down payment and closing costs can only mean one thing inevitably: something will break or some other financial emergency will pop up right after you close on your home.
3. How is your credit? If you have a low credit score you may be able to get approved for a mortgage loan, but at less-than-stellar interest rates.
4. What is the housing market doing? Now may not be the time to buy if the houses in your area are in the middle of a steady decline in value. You don’t want to buy a house and then wind up owing more than it’s worth.
5. Are you going to stay put? Think twice before buying a house if you plan on moving in a couple of years. It may be a better idea to rent until you’re ready to settle down into a home for a while.
Owning a home can involve lot’s of good stuff—like fierce tax deductions and pride of ownership—but it also can be a huge hassle when something breaks down and you have to foot the bill. If you’re ready to jump into homeownership then jump boldly, Fashionista. It’s a buyer’s market.
photo courtesy of FindYourHomeQuick.com