subject: Are You Ready to Buy a House [print this page] Are You Ready to Buy a House Are You Ready to Buy a House
It's a classic dream to own one's own home, but don't rush into a purchase without thinking about whether you're really ready to take the plunge.
Staying Put? Do you know where you want to live five or ten years from now? Is your job relatively stable? Sure, no one knows the future, but if you have no idea that you'll be able to work and live in the same area three or four years hence, stick with renting. If you plan to stick around longer than that, buying is a better deal.
How's Your Credit? Avoid nasty surprises that could derail your hoped-for mortgage. If you haven't looked lately, get your FICO score and a copy of your credit report. A free credit report is available through the Federal Trade Commission's annualcreditreport.com site (beware other sites that charge a fee or try to get you to sign up for fee-based "credit monitoring programs"). Look over your credit report for negative or inaccurate information. You can file a dispute with each of the credit agencies if something on the report is wrong.
What Can You Afford? Depending on whose article you read, a house should cost anywhere from 1.5 to 4 times your annual salary. Instead of relying on such a general rule and such a wide range do an Internet search for mortgage calculators. There are plenty of them out there. You just need to know your current salary, your current debts for other things like credit cards, and the interest rate and payment you hope to make. Any of these calculators can give you a good idea of the total mortgage you should take out, and what the payments will be. A bank may pre-qualify you for more, but that doesn't mean it's a good idea. And beware any realtor that tries to push you into a bigger mortgage and more house than you can afford.
Do You Have the Down Payment? Depending on the lender and on the type of loan your getting, your down payment can be anywhere from three to twenty percent or more. The bigger the down payment you can make, of course, the lower your overall mortgage will be but that's more out of pocket now.
Do You Have a Budget for Other Expenses? Sure, you've made the down payment, but you're not done getting out your wallet. Every house sale has closing costs, such as legal filing fees or appraisal charges. You may have to cough these up at closing. You're going to need a moving van, right? And does your new place have all the furniture you need? You really should change the locks, too. And if the new house didn't come with appliances or window treatments, be prepared to buy it all. These little expenses add up in a hurry.
For more information regarding Selling your Home, Buying your Home visit http://www.cash4lancaster.com/blog
