There is no doubt about it. If you are an adult with a good job, a logical mind, and an eye toward the future, you may be asking why you are not yet a homeowner. Interest rates are low, and there are homes out there waiting for buyers. While no one wants to pressure you, it does offer food for thought. How would you know if you were ready? What questions should you ask yourself before you buy?
First, can you “show me the money?” While there are few upfront costs associated with buying a home, the down payment has got to be there, somewhere, sitting in a bank. Depending on the type of mortgage you are looking at (FHA, conventional, 203K or jumbo), you’ll need between 3% to 20% of the purchase price socked away. If the property is rural or you’re a veteran, you may be a candidate for 100% financing, so check with a local mortgage loan agent.
The second question would be “have I been good?” We’re talking about credit. You don’t have to be perfect, but if your credit score is at least 640 or higher, you have much better odds of being approved, with a slightly lower threshold for an FHA loan. Lenders look at your credit score to determine if you are a good risk. Good rental record? No issues with credit cards charged to the max? Making car payments on time? You’ll find out just how judged you’ll be when a lender surveys your credit profile. Of course, a steady job is key here.
The next question to ask yourself is whether you can afford a mortgage payment. Lenders look at your debt to income ratio. Different types of loans vary on these ratios, so again, check with your loan consultant.
What about actually becoming a homeowner? Are you ready for the responsibility of a hot water heater failing you, a plumbing leak flooding your bathroom, or a roof that needs to be replaced in a few years? Your agent will recommend that you have the property inspected by a licensed professional and receive a report on what you’re buying, but that doesn’t mean you shouldn’t be ready for the unexpected once you own the home. It’s no longer a matter of simply picking up your phone and calling the landlord.
Another biggie is the question about truly needing a real estate agent. The answer is, yes. Trying to find a home and negotiate the price means you’ll up against another agent who has been there/done that all day long and will be acting in the interests of the seller. Buyers don’t pay for the services of an agent to help them locate and purchase a home, so there is no money out of your pocket for this. Plus, an agent is the neighborhood expert, advising you what you should look out for, what is happening in the area, and whether the price being asked for the home is in a reasonable range for values for that size/age home in that neighborhood.
For the best solution for your real estate financing needs, contact Sheila Siegel at Synergy Financial Group today.
Source: RealtyTimes, TheLendersNetwork, TBWS
