Planning to buy a house? You may have all the enthusiasm to get up your seat and start scouting for the perfect house for you and your family. But, one question remains to be answered first before you buy your dream house, “Are you prepared to buy a house?”
There are certain guidelines in understanding whether you are already set to buy a house. These guiding principles will aid you in deciding if you are capable of buying the house you want to live in.
Do you have a stable financial situation?
This is a very important consideration before you start planning on buying a house. Of course, you cannot buy a house if you do not have the money or the financial stability to own one. You must consider yourself as having the capacity to pay the down payment as well as the monthly payments before searching for a house to buy.
If you see yourself in the next 20 to 30 years as having a steady income, you can now get up on your feet and start scouting for the right house.
Do you have enough cash on hand for a down payment?
One of the major requirements in buying a house is paying the down payment. Buying a house requires a certain percentage (depending on your financier and loan) of the full price for a down payment so always be ready to have such cash, or check, on hand.
Remainder of the full home price will then be settled on a monthly basis via your home loan.
Are you capable of paying the monthly loan for your house?
Although you can now afford to pay the down payment, you must also consider your monthly payments. Monthly payments include mortgage and the property taxes at the end of the year as well as any home repair costs that may spring up when you least expect them.
To have a good idea on how much you would be spending on your monthly payment:
- Search for a possible house you want to buy. If you already have the down payment on hand, subtract this amount to the full price. The remainder amount will then be divided to the mortgage terms (i.e. a 30-year mortgage). The quotient plus the taxes and interest will then become your monthly payment.
- If you have an agent, you ask for a rough computation on what will be your monthly payment for the given home price.
To give you a lesser monthly payment, you can increase your down payment so the remainder of the full price will also decrease and consequently decreasing your monthly payment. Otherwise, choose a less expensive house.
Do you have a good credit rating?
Having a good credit rating will make you eligible for good rates in your mortgage. See with your agent or lender if you have a good credit rating or is qualified for a good mortgage rate. If not, ask help on how to improve your rating.
Are you ready to pay other expenses and costs?
Buying a house does not stop you in simply paying for the home price. You must also be capable financially in paying for other expenses such as fees, repairs for your new house both inside and out, utilities such as water and electricity and other house essentials you will need for your new house.
Buying a house is not something to be taken lightly – but it can be a really exciting and life changing experience. Go in with your numbers in order and your experience will be infinitely more pleasant.