How do I know if I’m ready to buy a home? That’s a great question, and it deserves a great answer. Below are the top 5 ways you can know if the time is finally right for YOU to buy!
#1. If you are renting. Rents are so high that it’s cheaper to own! If you can afford rent, you can afford to own. Homes are appreciating at an amazing rate. The easiest way to make an extra $25,000 per year is to own a home. For every month you pay rent, you lose an estimated $2,000 worth of appreciation, plus you lose your home interest tax deduction.
#2. Check your credit score. Lenders can work with you if your score is around 650 or above. The higher your credit score, the lower your interest rate. So, if it’s low, work on raising it. It is often not that hard to do, and it may not take long to do it.
#3. If you are getting a tax refund, bonus or a raise (some people are getting all three), put that money to work for you rather than spending it like a birthday gift! Investing in a home is one of the best ways to maximize your money.
#4. If you’ve been able to save at least a little money, you are probably ready to buy a home. The amount you’ve saved isn’t always as important as the discipline it demonstrates. Lenders love to see good habits, and you will need some funds to cover closing costs and inspections. It’s even better if you save enough for a down payment. If you can put 20% down, you can avoid private mortgage insurance (aka PMI).
#5. If you plan to stay in the area, buy a home. Don’t wait! Remember that the appreciating home prices we see every month work against you if you don’t own.
Now is a GREAT time to purchase a home. Interest rates are still very low, but they’re starting to climb! As rates go up, less people can afford to buy. That means more people rent, and rent goes up. So don’t wait!
If you have questions about buying a home (or any other real estate questions!) please comment or give me a call at 615-394-1823.
Verlyn Steward, Real Estate Answerman