Pay attention to these seven signs that reveal you might not be ready to buy.
You don’t make enough money – You might think you do but crunch the numbers first. You will want to make sure you have enough upfront money as well as on-going money. Upfront money is your down payment and closing cost. Buyers should figure about 1% to 1.5% for closing costs and at least 5% minimum down for a conventional loan and 3.5% for a FHA loan. Your on-going money needs to be enough to cover the monthly principle, interest, taxes and insurance on the property. This should be no more than about 28% of your income according to financial planners.
You have too much debt – okay, so you have enough to cover step one above. Let’s take a look at your debt. If you have maxed out all your credit cards, you may want to get them under control before owning a home. Lenders typically want your total debt load which would include your monthly mortgage payment to be 36% or less of gross income.
You don’t have enough savings – if you have saved for the down payment and closing costs – congratulations! That is one hurdle you made it over. What if your home needs an emergency repair? Would you have the money to fix it. You will want to save for the unexpected things that could happen like your air conditioner dies on a hot sweltering holiday weekend or a pipe could burst. Let’s also not forget about moving costs and any new furnishings you may need to decorate the new place.
You haven’t been on the job long enough – Most mortgage lenders like to see that you’ve been working the same job for at least two years. Being on a job for that length of time or longer shows stability. A changing in jobs or having income gaps signals instability.
You have poor (or no) credit – a bad score can indicate some sort of financial problem. A mortgage lender may have questions about payment history and may make some suggestions to improve your score. If it takes longer than six months to fix, you might not be ready to buy just yet. Having little or no credit history can also be a problem. Types of credit mortgage lenders will look at are rental history, car insurance, car payments, revolving credit history. They are looking for a pattern of good payment history with companies for 12 months or longer.
You are not sure what type of home you want – you might think you want a single family home, but you have options. Ever consider buying a duplex, living in one side of it and renting out the other for income? Perhaps a condo or townhouse might better suite your needs by providing a lock it and leave it lifestyle. It is hard to say I am ready to buy if you do not know what you want.
You are not ready to stick around – If you buy a house and have to sell the next year, you’re likely to lose money. Unless you can stay in the home for the next three to five years, you are not ready to buy. It typically takes that long to recoup the closing costs and post purchases expenses through appreciation of the home.
If you think you are ready to buy or would like to have a conversation about buying, click here to connect.
Author:Victoria Thompson Phone: 913-707-1011 Dated: February 12th 2018 Views: 227 About Victoria: Victoria Thompson has collectively lived in the Dallas area for over a decade, having recently moved...
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Veronica also known as “Roni” was born on an Army base in Panama City, Panama. Her family was soon stationed in Germany and she spent some of her younger years traveling and exploring Europe before her family settled in Austin, TX. Upon graduating from Texas State University, Roni made her way to Dallas to cheer on the sidelines as a Dallas Cowboys Cheerleader — GO COWBOYS!
After five years of high kicks and jump splits, she decided to take the leap into real estate. Roni is savvy, passionate and hard-working. Her desire to serve her client’s particular needs coupled with her market expertise and negotiation skills set her apart.
“What is most important to me is that my clients trust me with the purchase of their home. I’m honest, I’m loyal and I don’t treat anyone as if they are merely a transaction — That’s just not how I do business. I truly care about each and every client and I think that’s what sets me apart.”
Whether buying, selling or leasing, Roni will provide you the special attention one expects of a dedicated, top-producing real estate professional. She is praised most often by clients for her enthusiasm, patient approach, and undeniable trustworthiness.
You may begin the relationship as a client, but by the end of your home purchase, you’ll earn a trusted friend.