The U.S. home ownership rate has continued for the past year at a 64.2 percent, according to an April 2018 press release from the U.S. Census Bureau. If it’s your first time in the market of home purchasing, it may be a lengthy transition from renting into ownership. That means it’s time to ask yourself these questions, courtesy of CNN Money.
How Much Can You Afford?
Buying a house isn’t cheap, And it’s not just buying the house itself you have to worry about; it’s all of the costs that come after. First things first, you have to calculate exactly how much house you can afford. Make sure your estimate is accurate, since you don’t want to end up footing the bill for a mortgage that’s eating up all of your funds. It’s important that you know where all your money is going: travel, rent, all of your bills, transportation, entertainment and eating out. On top of those things, you also have to worry about where you are with your debt, whether it’s credit cards or student loans. Once you’re aware of your monthly budget, start drawing up funds meant to be put away for housing, Around 28 percent of your total income should be used on housing, according to experts.
In addition to the costs of owning and maintaining your home, you will also want to budget for a homeowners insurance policy for your Bergen County home. Your home is a major investment; you should make sure that you protect it.
Are You Down Payment Ready?
The more you can put down, the better. It says a lot about the down payment of your house. Just like with a car lease, it’s always better to put down more, because you’ll end up paying less in the long run, and you’ll get a better deal on the loan. So while it’s not required to put down a huge down payment, it’s recommended to put down a sizable amount.
How Much Will You Have After Closing?
It’s imperative that buying the house doesn’t burn you through all your money in your bank account. Be prepared for the long haul and prep in advance with months of savings lined up. That way you’re not scrambling to make ends meet for all of your other assorted costs.
How Pristine is Your Credit?
A good credit score for one interested in buying a home is at least 750 and up. Making consistent payments and having good credit proves that you’re ready to buy a house.
Where Are You With Other Debts?
By rule of thumb, you should not exceed 43 percent of your available coverage to take out a mortgage. Don’t go up in flames just to buy a house. The biggest question is if you’re ready for long term commitment. Be prepared to stay in a home for more than a couple years. Long story short, you want to grow some roots once you purchase a home. It makes the experience that much more memorable.
About David G. Sayles Insurance Services
At David G. Sayles Insurance Services, we strive to protect the investments of homeowners like you. Our comprehensive policies are customized for you to provide the exact coverage you need. For more information, contact us today at (800) 439-0292.