Q & A: Are You Ready to Buy a Home?
Nationwide, it seems the housing market is heating up, just as it does nearly every Spring and Summer – including in the Twin Cities area. Even with those seasons passed, the interest rates are still low with plenty of homes available on the Twin Cities real estate market. That considered, more and more Minnesotans are pondering if they are ready to buy a home yet. There are many things to consider, especially for those who may be first time home buyers.
Here are some questions and some possible answers to think of if you are considering buying a home.
· Are you planning to stay put? If the answer to this is no, you might want to reconsider buying a home. If you think you are planning on stay in an area for any less than 5 years, it may be worth it to really determine if buying a home is right for you.
· Have you done your research? There is a lot of research associated with buying a home. That includes what city or neighborhood might be best, where the real estate you can afford is located, and even what types of amenities you would like to live near. That’s not even including the financial impacts, such as what shape your credit score is in, how much mortgage you think you can afford, and more.
· How long have you been sticking to a budget? If you haven’t been sticking to a budget before you get a home, you’re probably not going to stick to it after you get one. That could put you at risk for financial jeopardy. Determine a budget – not just one to help you save for a house, but for how much money you expect you will have to pay once that mortgage is yours. And the insurance. And the taxes. Then make sure you stick to the respective budgets when appropriate.
· Do you have a reliable income? This is very important. If you take out a mortgage one month and the next month you lose your job, there isn’t a do-over. It’s best to be well-established in a job at a stable company for at least a year before applying for a loan. The longer you’ve been with the company, the more reliable your job is considered to be.
· Do you have a down payment? This one is hopefully yes and as close to 20% of your expected mortgage loan as possible. Though it is still possible to buy a home with zero down, many home lenders are skittish and would prefer that you have larger down payments than in years past.
Basically what these questions are getting at is, when it comes to buying Twin Cities real estate, “Have you thought it through?” It’s a huge financial commitment, the largest transaction that most people will make in their lives. It has the potential to make or break your financial security. Thinking about the answers to these questions is extremely important, especially if you are preparing to buy your first home. We want you to take the plunge, but we want you to do it in a financially secure way.