When you start thinking about buying a house, it's easy to let your emotions run wild.
You start scouring the internet on home search sites for houses that you can picture yourself living in, showing anyone who'll look at the great pictures of homes that you're discovering. You find yourself doing drive-bys of those houses, checking out the neighborhoods and the proximity to schools. You are forever on the quest for signs advertising open houses that you can visit in the areas that you're searching in.
It's exciting, and fun, to dream of that someday house. Getting to intimately know the housing market in your preferred area is a great way to become educated about the area amenities, and how quickly houses are selling for, and for what price, and how far your dollar will go.
That said, buying a house before you're ready to, jumping into something that you really can't afford, and letting your emotions take the lead, really isn't worth it.
Take some appropriate steps prior to purchasing to ensure that your new house is a "home sweet home," not a financial burden down the road.
Below are some signs that you may be in a good position to purchase a home.
1. You have a healthy savings account. Once you own a home, you'll no longer have the landlord to fall back on for those emergency repairs and general maintenance issues that arise. If the water heater starts leaking, or the furnace goes, you'll be the one repairing and will need to have the cash available to fix those issues.
2. You have a sizable down payment saved. A larger down payment means you'll pay less in total interest over the life of the loan, you'll enjoy lower monthly payments, and you may enjoy a lower interest rate if you put more down.
3. You can pay your closing costs. There will be closing costs associated with the purchase of your home, such as the loan origination fee, appraisal, prepaid property taxes and mortgage insurance, title insurance, etc. On average, closing costs range from 2 percent to 5 percent of the purchase price of the home.
4. You can cash flow your move. Whether hiring a moving company, or renting a moving van and packing and moving yourself, there will be moving costs to consider. Supplies for packing, deposits for utilities, new appliances that might be needed, or pre-move in maintenance like painting, cleaning supplies, or new furniture costs, should be budgeted for.
Purchasing a home is a process, and it is possible to plan appropriately now so that the purchase doesn't become a financial burden later. Start to take the steps today to realize your dream of homeownership.
When purchasing and maintaining your home isn't a financial burden, it is that much more "sweet".