Signs You Should Purchase A House
1.You’ve Got Your Debt Under Control
Do you have your debt under control? Before you purchase a house be sure you are debt free. The extra cash flow will allow you the flexibility to spend more on a home rather than on your debt.
2. Your Credit Score Is On The Rise
Credit is important. Your credit score will play a major role in your ability to get a home loan. Your credit score is usually lower when you are younger, and at the start of your career. As you prove yourself to be a dependable borrower as you pay down your debt, your credit score with go up. With a credit score of at least 620 you can qualify for most mortgages.
3.You Have A Down Payment
How much do you have saved? You can save thousands of dollars in insurance costs over time with a strong down payment. Most of the time you will find that there are few benefits when bring a large down payment to the table. You can avoid paying for private mortgage insurance by putting a 20% down payment (PMI). PMI is a type of insurance that protects the lender if you default on your loan. Lenders require that you PMI if you do not have a 20% down payment. If you have not already, it may be time to start saving your money.
4.You Are Steady In Your Lifestyle
If you are ready to settle down, stay in one place for at least a few years, may be purchasing a home might be a smart move. Yes, buying a home is a big commitment so is a mortgage. If you do not plan on staying in your home for long or do not know where you career is going then reconsider buying a home.
5.You Need More Space
Everyone needs space. If you are thinking about starting a family, you might want to consider expanding your space. Having an extra room can make a enormous difference.
6.You Have Considered The Cost Of Homeownership
Being a homeowner goes far beyond monthly payments. Here are some costs of owning a home:
- Insurance: Legally you are not required to carry homeowner’s insurance, unlike car insurance. Mortgage lenders require you to have adequate insurance as one of the conditions of the loan. Homeowners pay on average $100 a month for homeowners’ insurance.
- Property Taxes: No matter where you live you must pay property taxes. Property taxes go to your local governments and pays for fire department public schools, ect. Property tax is calculated by local government as a percentage of your home’s value. The more your home is worth, the more you’ll pay.
- Closing Costs: Closing costs are expenses you pay to close on your loan one-time only. Usually you can expect to pay between 3% to 6% of your total loan value. Closing costs may include title insurance, lender fees, attorney fees and more.
- Utilities: Owning a home is different from renting one. Your landlord might cover some of your utilities when you rent but when you own your home you have extra expenses. You need to make sure you can cover your water, trash collection, electricity, and sewage bills every month.