Search for any article on real estate lately and you will read a lot of doom and gloom scenarios. While it is true that the real estate market is struggling overall, there are some top tips to consider before you purchase a home, no matter what the rest of the mortgage industry and real estate market is doing overall. Before you sell your home or look to buy a new property, answer the questions below to see if now is the right time for you to purchase.
Can you commit? If you can not stay in your new home for at least three years, then now is not the time to buy. With the money that is required to purchase and sell a home, homeownership can end up costing you a great deal of money. If this is a possible outcome for you, it is actually more financially beneficial to rent rather than own until your life becomes more sedentary.
How is your credit? It is remarkable how much of your life is dependent upon your credit score. If you are considering purchasing a new home, the first step is to look at your credit report. If your credit score is low, wait to purchase. Repairing your credit now can translate into thousands of dollars saved in your future as homeowners with low credit scores will incur higher interest rates and more money out the door to the bank instead of towards the property to build equity.
Do you know how much home you can afford? Throw away the online mortgage affordability calculators. Many of these calculators do not factor in a number of important influences when it comes to buying a home and will instead tempt you with a larger home price possibility so that you will call their offices. Instead, follow the savvy rule of thumb that states you can buy a house that is 2.5 times more than your annual salary. Take into account your debts and expenses before you commit to that number, however.
What school district are you searching to buy a home in? It does not matter if you do not have children or are not planning to have any in the future. The savvy home buyer knows that if they want to sell their house fast and see a good increase in the price, they should invest in a good school district. School districts can be the biggest motivating factor for motivated buyers in the future and will ensure a boost in your property value year to year.
Have you been preapproved? It is fun to look at houses. It is not as much fun to go through the bureaucracy of getting preapproved. However, this step is a necessary one for home buyers. Getting preapproved from a lender involves submitting your actual income, debt and credit history and can save you countless hours of grief and heartache from looking at a home that you simply cannot afford. Knowing how much you can spend ahead of time will make the home buying process easier and more enjoyable.