Owning a home is an integral part of the American dream. Most people in the United States– most people around the world, for that matter, want their own home because they don’t have to worry about the cons of renting, like landlords raising the rent or being restricted in what they can do/have in their rented space. Overall, there’s a sense of satisfaction that comes along with owning a home. Although it’s not in easy reach for everyone, you can prepare yourself to buy a home you’ll get to call your own.
Roughly two-thirds of Americans own their homes – the term homeownership includes both outright ownership and people who pay towards mortgages taken out against their residences – though this doesn’t mean everybody in this constituency is in a sufficiently stable condition to purchase homes.
Here are a few questions prospective home buyers can ask to find out if they are actually ready to purchase homes they have their eyes on.
Are you comfortable with taking on debt?
Although most readers are more than accepting of paying more later to enjoy more in the interim – the United States is one of the most debt-riddled nations, after all. Potential home buyers should think deeply about whether they’re okay with being in debt for two to three decades while they pay installments that will likely make up a hefty portion of a household’s annual earnings. If you need to take out a mortgage in order to afford your home, make sure you’re ready to pay it for the full term.
What does your credit score look like?
With few exceptions, credit scores truly only matter when it comes time to take out loans or financed goods. The lower one’s credit score, the higher interest charges will be. Prospective home buyers with low credit scores should take at least a few months to build their credit scores up. Afterward, go through with the home-purchasing process. Even if you have poor credit, buying a home is not farther away than you think!
Are you ready to settle down in the same place?
Homes are purchased with “forever” in mind. Whatever home you buy, ask yourself if you’re ready to settle down there. This means you want to raise your family in this home, and eventually retire there as well. It’s better to purchase a home and live there for the full term of your mortgage than sell before your mortgage is up.
Have you saved for the down payment?
Prospective home buyers should always save up one-fifth of a home’s purchase price in cash to plop on the table for a down payment. This saves tons of interest expenses. Most real estate agents will be willing to work with you on a down payment, but you should be prepared to put down in cash $10,000-$20,000 when sealing the deal.