Why It's a Great Time to Buy a Home
Should you buy a home? If you already have a good rental place or are living with family, buying a home can be a difficult decision. But if you say yes to the factors below, maybe you should start thinking about buying:
- You want to stay in your home for a long time: If you plan on living in one spot for a longer period – such as several years – buying a home can make great financial sense by building equity.
- You can afford it: Sure, buying a home does have more upfront costs than renting, but again, you will be building equity with your home. Use any online mortgage calculator to figure out these costs and save up. And don’t forget about the currently low interest rates!
- You like the lifestyle: When you want to plant some familial roots, enjoy your own space, and want to make your space your personal haven, then it is a great time to buy.
- You want to make it your own: Because the rental property is not yours, you are severely limited in what you can and cannot do with your space. However, when you own your home, you have great flexibility in what you do. You can have fuchsia walls. Add an extra bedroom. Expand the driveway. Replace grass with ground cover. As long as the changes adhere to municipal laws, you have the freedom to do what you want when you own your home.
The Consequences of Waiting
Because it is a huge financial decision, who can blame you for wanting to wait before buying your first home? It gives you more time to get a down payment, save up for closing costs, or become more stable in your job. But waiting can have a negative effect too. In that time, interest rates could rise, there may be less favorable terms for you as a first time home buyer, or you lose out on the house of your dreams. Can you afford to wait?
Buying Versus Renting
Buying a home sounds great on paper, but for the first time home buyer, is it better than renting? Ultimately, that depends on you. Here’s why:
- Only you know if you can afford your home. As stated earlier, using an online calculator to determine costs can show you whether you can afford all aspects of a home. This is relative to the cost of houses in your specific area, your savings, and your income.
- Do you want to own a home? If you crave stability, equity, and a place to call your own, then home ownership is your path. Keep in mind you need to pay for renovations, have higher utility bills, and allot time for maintenance. However…
…with renting, you may not have the same amount of bills to pay, but you also forego control over your space, you get less privacy, and you do not create equity through your home.
The Mortgage Process
What exactly is involved in the mortgage process? Below are 10 basic steps that every first time home buyer should follow:
1. Pre-qualify to get a ballpark figure of what you can afford.
2. List what you want – and don’t want – in houses within your price range.
3. Get pre-approved for a mortgage.
4. Find a real estate agent and start home shopping!
5. Make an offer. Be prepared to negotiate.
6. Get a home inspection.
7. Work with a mortgage lender such as Shamrock Financial to apply for your mortgage.
8. Get a home appraisal.
9. Coordinate and complete the paperwork.
10. Get the keys to your new home!
Pre-qualifying for a mortgage is not the same as being pre-approved. Pre-qualifying simply gives you an idea of how much you might be allowed to borrow. Pre-approval, which requires a deeper look into your finances, is a conditional commitment of how much you are allowed to borrow. It shows you are serious about buying a home, it is free, and it is valid for a set time.