Here’s How to Know When It’s Time to Buy a Home
There are thousands, if not millions, of people in the United States that want the independence and excitement of owning their own home. From the control to the decorating, to the financial investment, owning is usually a great idea. The hardest part of becoming a homeowner isn’t the desire; it’s the ability to come up with enough money. Financial capability prevents so many from realizing their dreams. So, what do you need to be financially ready for homeownership, besides, of course, a great credit score?
The 20% Standard Down Payment:
Depending on where you live and what the housing market is like, you'll find varying down payment ratings. There is no specific number you’ll need to have before you embark on this journey. That being said, you’ll need some money for a down payment. Traditionally, 20% was the normal amount to put down, but on a $600,000 home, that’s $120,000, which is quite a bit of money for most people. Because of the economy and the way the housing
market has changed, some banks will take 3.5% - 5% as a down payment without an issue. FHA loans have especially low down payments
. Know though, that not having 20% down, will require a PMI, or private mortgage insurance
, which can increase your monthly payments quite a bit.
Other Home Buyer Costs:
It’s not only the down payment that you need to worry about as far as up front money goes during the home buying
process. There are also closing costs, the actual move-in costs (rental trucks, gas, labor, etc.), plus you’ll still need to have an emergency fund saved up for those “what ifs” that are bound to happen. Budget with all of this in mind.
Always Call in the Pros:
After all is said and done, meet with a lender or mortgage broker that you trust. The professionals can talk you through the ins-and-outs, and even find other places where you can save money. If you still feel good about it, it may just be time to buy your dream home