If you’re tired of renting your only other choice is to buy a home or a condo. It’s not always an easy decision and depending on your credit and your employment status you may find it difficult to get yourself into a home. These are a couple of the factors that will, in the long run, determine if you are in fact ready to invest in a new home.
Buying a home isn’t an event to take lightly. It may be cheaper than renting, even your house payment may be cheaper monthly than what you pay for rent, but you’ll have other expenses that you don’t as a renter. Here are some things to help you determine whether or not you’re ready to own your own home.
How’s Your Credit?
When you apply for a home loan the first things the bank is going to look at are your credit score and your credit report. They want to see that you don’t have a lot of debt so that they have a better chance of you continually making your payments on time. If you know you have bad credit then you should start on the path to credit repair before you work on owning your own home.
Can You Afford To Make Payments?
The bank or credit union you go through for your loan is also going to look at your income to determine in you can afford to make your monthly payments. Your payments will be determined by the cost of the home as well as how much money you have for your down payment. That’s another important thing, having money to put down on your home. This amount is most commonly about 20 percent, but lately, people are getting away with 5 and 10 percent down payments.
How About The Property Tax?
Your mortgage payment isn’t going to be the only steady payment you have to make. If your apartment came with heat or electric included you need to realize that won’t happen when you’re buying your own home. You also need to have money to pay your annual property tax, which can be a variety of different amounts depending on where your home is (within a city you may be paying more than you would for a rural home).
What Happens If You Need A Major Repair?
Another big difference to consider when it comes to owning as opposed to renting is the fact that you are going to be responsible for your own major home repairs, so if your water heater bursts it’s you that will be footing the bill for a plumber and a new water heater. This means that you definitely want to have a savings account already somewhat flush before you take ownership of your new home, and make sure to have someone come check it out, like a plumber, ahead of time to make sure you have a lesser chance of major repairs right in the beginning.