Many people dream of one day buying a house, but the simple truth is that home ownership is not suitable for everyone. Buying a home is an enormous decision that requires plenty of preparation, commitment, and financial know-how. Below are a few questions that any prospective buyer should ask themselves before taking on a mortgage:
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Are Your Finances in Order?
It may seem like an obvious question, but many people don’t consider the big picture when it comes to financing a home. A mortgage isn’t the only cost to consider: you have to factor in utilities, property taxes, insurance, realtor fees, and any potential repairs. Take a good look at your income, as well. If you are in a career field that is volatile or prone to lay-offs, it may be dangerous to commit to a mortgage.
Why Do You Want a Home?
Determining why you want to purchase a home is a critical step in the process. For many people, a home signifies financial stability. For others, it is a place to settle down and raise a family. If you are a point of transition in your life, such as entering a new relationship or taking on a new job, it may be wise to wait on buying a home. If you plan on starting a family, make sure any homes you are looking at have enough room and amenities.
What Kind of Environment Do You Want to Live In?
Different people will have different ideas of what constitutes an ideal neighborhood. A young person may be looking for a trendy downtown location, while someone looking to start a family may be on the lookout for a quiet suburban home. For those with children, make sure to learn about local schools, bus routes, and parks, and look into neighborhood crime rates.
What Can You Realistically Afford?
One of the first things any future homeowner needs to do is to take a careful inventory of their assets and income flow. Most experts agree that a buyer should aim to make a down payment of at least 20%, since it reduces your future payments and ensures that you aren’t suddenly left struggling to stay afloat if money gets a little tight. Research what home loans you qualify for and speak with a financial advisor to get an expert opinion on your financial outlook before you begin looking for a home.
Do You Have the Right Realtor?
Fostering a good relationship with your realtor is absolutely essential when purchasing a home. Look for a realtor that has the right combination of experience, reputation, and knowledge of the area. Ask how long the realtor has been in business, how many homes they have successfully sold, and whether they have any references they could share. It may seem like a lot of work, but picking a good realtor can be the difference between a dream home and disappointment.
Purchasing a home is often the biggest financial decision a person will make, so it pays to ask these crucial questions beforehand. By learning about the financial commitments and lifestyle changes that purchasing a home entails, prospective buyers can be more prepared and have a better idea of where they truly stand.