When you buy a property, you are making a long-term investment decision in your future and potentially taking the first step toward your future financial security. However, buying a house before you are ready can actually be a negative move that can put a cramp in your plans.
It is important to assess where you are in life, so that you know whether or not it is the right time to buy a house. Here are a few questions to ask yourself to determine if you are ready:
Do You Have All Of Your Finances In Order?
Is your credit score looking healthy? Have you paid off your credit card debt, student loans or personal loans? If not, it is important to clean up your finances and pay down your debts before you start looking for a home, or you will be adding a mortgage on top of the debt before you are able to handle everything.
Do You Have Enough For A Down Payment?
Just because you can buy a home for as little as 3.5% down payment, doesn’t mean that you should. You will have your dream home, but your mortgage payments will be so high that you won’t have any money left over for repairs or improvements. Also, you will end up paying thousands of dollars more in interest over the length of the loan. The bigger down payment you can save, creating equity in your home, the better.
Are You Earning Enough To Comfortably Afford The Mortgage Payment?
It is recommended not to agree to monthly payments that are more than 25% percent of your pay – including taxes and insurance. Stretching yourself thinner will leave you little room for error and if your income drops for any reason – you will quickly find yourself in hot water.
Will You Be Happy To Settle In One Place?
Buying a home is a long term investment, so if you think that you might possibly move somewhere else in the next five years, you might want to think twice about buying a home and rent instead.
If you answered yes to all of these questions, you are ready to purchase your first property. For more information, contact Tom Crimmins Realty at 718.370.3200 or email info@tomcrimminsrealty.com.
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