If you’re thinking of making the switch from renting to buying, you are probably wondering when is the right time to take the plunge. There is no exact answer, as this will depend on a number of factors, especially your own finances and personal situation. Learning what you can expect from owning, as well as the requirements for getting a mortgage can help you make an informed decision.
Your financial responsibilities
As buying a home is a major financial undertaking, it comes with risks and responsibilities. You will have to budget for a number of things, such as loan payments, insurance, property taxes, as well as repairs, upkeep, and utility bills. This seems like a lot if you’re used to renting, but then there is the benefit of having your own place and the freedom to do whatever you want with the property.
Home loan companies in Fort Myers and other parts of Florida share some of the costs associated with buying and owning a house:
- Down payment
- Closing Costs
- Insurance costs
- Homeowner’s association (HOA) fees
- Moving costs
- Service setup fees (for utilities, Internet, cable, and other services)
- Remodeling and decorating costs
It is important to take note that homes will require major repairs and renovations over time. These may include roof repairs or extending the home or adding rooms. You will also have to budget for these, depending on the repairs needed or how you want your house to look like.
The qualifications of getting a mortgage
Buying a house usually involves getting a mortgage. While there are many lenders who can give you a loan, it is still important to know where you stand financially. You can start with knowing your credit score and making the necessary corrections or improvement to make your score better. Do take note that a higher score demonstrates financial discipline, which then helps you get the lowest rates.
Another important consideration is the amount of down payment you are willing to pay. The ideal down payment is 20% of the purchase price, but this seems unattainable for most borrowers. You can aim for at least 10% to 15%, as putting down too little means having more loan balance to pay and paying the private mortgage insurance (PMI) or insurance premiums for a long time.
The right time to buy
In most cases, it is the right time to buy if your finances are in order and if you’re ready to settle down in one place. If you are currently renting and honestly believe that you are capable of financing a home purchase, it may be the right time to buy. If you are unsure about your finances and settling down in one place, however, it is not the right time to take the plunge.
Do remember that there is no perfect date or month to buy a home. You should also know that buying shouldn’t start with house hunting, as this can set you up for disappointments if you later found out the house is out of your budget. You can benefit from getting in touch with a reliable lender or home loan company to get prequalified or preapproved, as well as know the process of getting a mortgage.
Being prepared by doing your homework and talking to the right professionals can help you make an informed decision. You should also make an extra effort in making yourself an attractive home loan borrower by improving your credit score and saving for a reasonable amount of down payment.