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Owning a home is a fulfilling experience that many people look forward to. However, despite the freedom and other benefits that come with moving into your own home, making a move at the wrong time can plunge you into a deep financial mess.
If you have been preparing to buy a home, and you already know the type of house you want - apartment, single-family home, townhouse, duplex, etc., here are ten reasons you should take the leap this year.
1. You Need More Space
Maybe your rented home is beginning to feel cramped up and can no longer accommodate you comfortably, or maybe you're planning to have a kid and need an extra room(s), or maybe you need more space to set up a home office or a workshop - whatever the case, buying a home may be a better option. Acquiring a spacious home that can accommodate all your space needs is a liberating move and a much cheaper option in the long-run, compared to moving into a bigger rental house.
2. Your Savings Can Cover the Down Payment
Mortgage down payments are hefty no matter the financier. Most experts advise that you put aside at least 20% of the mortgage amount as a down payment. Although there are facilities that require a down payment of as low as 3.5%, like the Federal Housing Administration (FHA) loan, the amount is still substantial. This is in addition to other initial home acquisition costs, like insurance (in some cases), closing costs, taxes, initial fixing, etc.
If you have saved enough to cater for the down payment plus the additional acquisition costs and remain with some cash reserve, then you don't have to procrastinate buying a home any longer.
3. You Are Tired of Renting
Though there are situations when renting becomes the most financially sound decision, there are numerous downsides to living in a rented house. The fact that you cannot customize the property to suit your tastes and needs is one major limitation. Again, the rent expense goes into building your landlord's equity with no corresponding investment on your part. If you're tired of this and other woes associated with renting, then gear up towards buying your home this year.
4. You Have a Healthy Net Worth
Suppose you have steady income streams (employment, business income, etc.) and some substantial investments that balance well with your liabilities, giving you impressive net worth. In that case, you may be financially ready to buy a home.
However, if you're swamped in debts and don't have a reasonably stable source of income, even if you have other investments elsewhere, you may need to work out your finances first so that you don't fall into repayment issues soon afterward.
5. You Can Afford the Installments
Once you have pumped your savings into the down payment and you move into your new home, you may end up being financially drained. Nonetheless, if your income is enough to cover the mortgage installments plus everyday expenses, then you may be ready to buy that home you've been dreaming about.
6. You Can Take Care of Maintenance
Owning a home is different from renting in that the cost of maintenance falls sorely on you. Once you buy a home, you need to set aside some funds to cater for regular maintenance plus any unforeseeable repair needs. If your finances can cover these costs in addition to other financial obligations, then consider investing.
7. You Are Ready to Settle Down
Considering settling down this year? Then buying a home may be a convenient financial investment. It'll allow you to set up in a home where you can create lasting memories. Moreover, you two can pull your finances together and repay the mortgage a lot easier.
8. You Have a Secure Job
If you have a secure job with feasible growth opportunities or run a successful business, and you intend to stick around for the next five or more years, then buying a home may be a good option for you.
9. Your Credit Score is Impressive
Having a low credit score can make a mortgage quite expensive. Though FHA and conventional loans are available for anyone with a score of at least 500 and 620, respectively, you end up paying a higher down payment. The interest rates are also relatively high for low credit scores. But if your rating is around 760 and above, you can bag yourself a mortgage with a low-interest rate plus a load of other benefits.
10. You Want to Invest
If you're debt-free, have stashed away some savings, and your income is stable enough that you're considering making some significant long-term investment, then buying a home may be a worthwhile option. Not only will you save on the money you have been losing through monthly rent payments, but you'll be able to build your equity as the property appreciates.
Let Us Actualize Your Dream
If most of these ten reasons reflect your situation, and you feel right about making the move, get in touch with us by reaching out to one of our local expert loan officers.