For years, buying a home has been the American dream. However, recent generations have turned to renting and a lot of people are starting to question if buying a home is in their best interest. There are plenty of benefits to becoming a homeowner. Your personal circumstances are important considerations when deciding if you are ready to purchase a home. Michele Harmon Team has important questions for you to consider when facing this decision.
Do you plan on staying put?
Are you wanting to stay in your current city for the long term or are you going to be ready to leave in a couple of years? If you intend on growing your family and raising them in your current city, buying a home would make complete sense. Many financial experts advise that you live in a home for a minimum of five years before selling to break even on closing costs. If you see your current city in your five-year plan, now may be the time for you to buy a home.
What does the current housing market look like?
Mortgage rates are an important factor to consider when purchasing a home. Does it financially make sense to purchase a home at this time? For example, the Covid-19 pandemic allowed mortgage rates to hit a historic low and investing in real estate during a period of low mortgage rates can save you tons of money in the long run.
Are you secure in your job?
If you feel certain that you will stay in your current job, it may be a good idea to buy a home. Steady income will help you create a budget, pay your mortgage on time, and build equity. Choosing to buy a home will also allow your payments to go towards owning the home rather than wasting your money on rent.
Are you ready for stability?
If you are done with moving from city to city and are looking for some stability, owning a home may be ideal. You will have a set neighborhood, school zone, and community to belong to. If you are planning on raising a family or if you already have one, it could be helpful to your children to have a stable home to learn and grow in.
Are you interested in building equity?
Equity allows you to put your money towards your home rather than throw it away on rent. When you sell your home, you may be able to have some of your investment returned to you to put towards your next home or another large purchase.Real estate tends to be an appreciating asset. Does this sound like something you could benefit from?
Could you use a tax break?
During your first couple years of homeownership, most of your payments will go towards interest. You can deduct a percentage of your interest on taxes. This is definitely an awesome perk for homeowners! We all love receiving a large check after filing our taxes each year.
Will you qualify for a loan?
Typically, lenders look for a minimum FICO score of 620. However, some lenders are willing to go down to 580 or below. Borrowing rules are constantly changing. Consider shopping with multiple lenders when applying for a mortgage loan. Michele Harmon Team has several lenders we recommend to our clients.
Click here to download our list of preferred lenders.
Do you have a down payment?
Although you do not always have to provide a down payment, there are many benefits in doing so. Putting down 20% of your home price can help you avoid the cost of paying private mortgage insurance. In addition, you will receive smaller mortgage payments and you can have a pick from a larger selection of lenders.
Can you handle repairs?
As a homeowner, you have to be prepared to fix any problems that may arise such as a leaky sink, a broken air conditioner, or a toilet that will not flush. Be prepared to fix the problem yourself or have the funds to pay someone else to fix any issues.
After asking yourself these questions, you may have come to the conclusion that you are ready to purchase a home. We would be so honored to help you. Call Michele Harmon Team at 713-818-1330 to get started and refer to Michele Harmon Team’s Buyer’s Guide to learn how to start the home buying process. Make sure to contact us with any questions!
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