Are you Ready to buy a home in Coral Gables and Stop watching Rent increase?
By: Ashley Keihn
Writer for Shawn Smith
Are you sick of paying rent that goes up every single year without changes to the property? Are you ready to have a home of your own without answering to a front office for every decision you make? It might be time to look into buying your own home. While owning your own home is typically seen as the American dream, it’s not for everyone. Since it takes more than just wanting a home to actually own and maintain one you need to be sure that you’re ready to own before you make the call to the real estate agent.
We’ve put together a list of things you should consider when deciding if you’re ready to make the leap into home ownership.
Are you Financially ReadyA
Simply wanting to own a home isn’t enough to allow you to own, you have to be financially ready as well. There are several sites online that allow you to compare the costs of buying with your current rent to see how long it will take before the costs are equal to show you the break even horizon. One way that this can help is to see how long it will take for you to break even, if you can see yourself living in the same place for that many years then it makes financial sense to buy right now. If you don’t think you’ll stay settled that long then you may want to continue renting for awhile longer. H
How Much can you Afford?
When you buy a home you’ll need to have enough money for a down payment, a monthly mortgage and other costs each month for the next 5-25 years depending on your loan and how long you plan to stay in the home.
Down payments, paid up front in a lump sum, will fund the equity in the home and let your lender know you’re ready to be a homeowner financially. The actual number varies depending on the lender but typically between 3 and 20 percent is accepted, with 20 percent giving you the best rates in the many cases. Keep in mind that if family or friends offer to help with the down payment to take it as a gift rather than getting a loan because lenders can add the debt to your debt-to-income ratio, which can’t top 43 percent, and it can hurt your qualification for a home loan.
Monthly mortgage payments, paid each month, include the loan principal, interest, homeowners insurance and pro-rated property taxes. Lenders want to make sure you can afford to make the payment, have employment and are what they deem credit worthy before they approve a loan for you. This means you need to know how your credit score and reports stand, correct any errors early, have proof of your employment and proof that your bills have all been paid on time.
Can you Handle the Commitment
Home ownership comes with a great deal of decisions and responsibilities, as well as commitment; are you ready for it emotionally? You will be choosing an agent, lender, neighborhood, and paint colors just to name a few of the decisions you’ll have to make. Can you give up your free time and devote attention to maintaining all aspects of the home, down to the weeds and the gutters? While you lived in an apartment or condo these are likely things you didn’t have to deal with so it can be a big adjustment. Owning your own home is an investment into your future, one that you’re going to be proud of, but only if you are willing to put in the time to maintain it. Decide if you’re ready to make this leap into responsibility before you call an agent.
Are you Handy?
How handy are you? While you are renting you typically can call a landlord or maintenance man for any issues that arise in your home at no additional cost to you, but once you own your own home that’s no longer the case. If you call a repair man for every sound, smell or broken appliance you’ll be broke within a year. There are several things that every homeowner should know how to do themselves and many are fairly easy to learn:
- Find and shut off water valves for indoor and outdoor faucets
- Locate and change the furnace filter
- Change a toilet flapper
- Clean debris and leaves out of the gutter
- Change the smoke detector batteries
- Find studs to hang shelves and photos
- Paint any room
- Locate the fuse box and flip breaker switches
Most people can figure out how to do basic home repairs on their own, this will save you valuable time and money, by keeping you from calling in a repair man for simple tasks. You can find several online resources to help you learn how to perform many of these tasks as well.
If you can confidently answer each of these questions you may be ready to make the jump into the home ownership game and find a qualified agent.