Questions To Ask Yourself Before Taking The Home-Buying Plunge
Many house hunters feel pressured to buy because they don’t want to keep “throwing away” money renting, or they simply fall in love with the white-picket-fence listing they spot online. Neither of these, however, are good reasons to take the purchasing plunge. “It’s so important not to romanticize home-buying,” says Bree Al-Rashid, a managing broker for Redfin who’s based in Seattle. “The truth is that homeownership is an endurance race. The more tough preparation you do up front, the better you’ll feel from beginning to end.” Translation: It takes more than just plunking down a 20% down payment to call yourself ready. You have to be financially, emotionally and mentally prepared—or risk becoming one of the one in four home-owners who feel buyer’s remorse. After reading this effective artcle written by Christine ryan jyoti. These are the best Questions to ask your-self before buying a home are according to Forbes.
How Healthy Is My Credit Score?
A mortgage can be one of the biggest financial obligations you’ll ever take on, so why add to that burden by paying a high interest rate?
Fact: The lower your credit score, the higher your interest rate is likely to be. And that’s why it is important to boost that three-digit number as much as you can before you even get close to the borrowing stage.
Am I Making Good Progress on My Savings?
No, we’re not talking about saving up for your down payment here.
It’s important to feel confident that you can continue to contribute to your key financial goals, while also juggling a house payment. The last thing you want is to have a big mortgage waylay your retirement plans or your ability to have adequate emergency savings, which should be six months’ worth of take-home pay for most people.
Have I Accounted for All of the Costs of a Home?
Your mortgage payment isn’t just your principal and interest; it also includes the taxes and insurance you’ll pay on your home. Add to that the cost of utilities, periodic repairs and regular maintenance—think lawn care, gutter cleanings, snow removal, pest control and the like—and the costs of homeownership can quickly snowball.
On average, you can expect to pay between 1% to 4% of your home’s value for maintenance a year, depending on the age of the house. If you’re handy and proactive, those costs could be much lower, but don’t delude yourself into thinking you can be Ms. Fixit if you’re the type to have your plumber on speed dial.
Am I Mentally Ready to Be a Homeowner?
In addition to the financial outlay, there’s a significant emotional component to the process. So if your finances are primed for home ownership, but your heart and mind aren’t quite as pumped, now may not be the right time to take the plunge.
“Many people decide to move during a time that is coupled with another life event,” Al-Rashid says. “If you are still psychologically or emotionally distracted by that event, you might be better off renting for a year and returning to the hunt later as a more focused buyer.”