Community Update

ARE YOU READY TO BUY A HOME?—SIGNS YOU’RE READY TO TAKE THE PLUNGE

While a buyer’s market is certainly a great thing for all those who are considering home ownership, it should never be the main driving force behind the desire to purchase your first house. Plain and simple, buying a home is an incredibly large decision, which should generally be made regardless of the market’s health because future pricing predictions are hard to make.




Instead, it’s important to approach the buying decision like any other business venture—use facts, exercise prudence, and refrain from verdicts based on emotion. Investments need to make sense, which means your finances need to be in order. To understand if you’re heading in the right direction, pay attention to the check list below.



1.) YOU ALREADY BUDGET: Houses are expensive—as are the bills that come along with them. If you don’t have a household budget at the moment, it’s imperative that you start one because money-management skills are a must. Pay attention to where your money goes each month and understand exactly what you can afford by drawing up a mock budget that includes your tentative mortgage payment, insurance, property taxes, HOA fees, utility bills, and upkeep costs.



2.) YOU ALREADY HAVE A GREAT DOWN PAYMENT: While there are options for those looking to buy without a sizeable down payment, the best way to get your foot in the door is with some money saved in advance.



3.) RELIABLE INCOME: In order to take on the long-term commitment of owning a home, having a secure, reliable cash flow is incredibly important. If you’re not certain of where you’ll be in 5 or 6 years or you’re planning on making a major life change (i.e. returning to school, starting a family), then it might be a good idea to really consider your future cash-flow abilities.



4.) EMERGENCY SAVINGS: Saving can be difficult for a lot of people, but if you have enough set aside to cover three to six months of living expenses, then you’re absolutely on the right track. Life happens, so on the off-chance that you find yourself on the wrong side of some adverse circumstances, you’ll want to know that you can still manage your mortgage.



5.) GOOD CREDIT: Part if having decent credit means having your debts under control. If you still owe a lot on several large loans, it’s really important to pay them down in advance. You don’t necessarily have to have perfect credit; however, a decent history will help you get the lowest interest rate possible.



6.) NO MORE LANDLORDS: Unlike renting, when you can simply place an order to have maintenance issues remedied, home ownership means understanding that you are now your own landlord. Therefore, when considering your finances, it’s important to take upkeep expenses into account.



Pam Wright, On Q Financial

404-445-1033