Owning a home is a dream that many people have had since they can remember. Perhaps your pals are all buying homes and it’s pressuring you to do the same. Or maybe your rent just went up again. Whatever the case, you definitely can’t wait any longer to become a homeowner.

So how do you know if you are financially ready to buy a home? Answering the following questions can help you determine if you are ready.

Are you debt-free and count with a good emergency fund?

This ensures you could deal with any surprising expenses that come your way after you  own a home. If you are not, make sure to start working on becoming debt-free and putting money into an emergency fund. You do not want to struggle the first time any maintenance repair knocks on the door.

Have you saved up for a Down Payment?

The ideal plan will always be paying for a house 100% cash. If paying cash for your house isn’t within the cards this year, set a purpose of saving at the least 10%. Of course, 20% will place you in a good higher role due to the fact you’ll avoid paying personal mortgage insurance (PMI).

Can you pay for your own closing costs?

A few home dealers cover closing costs to help with the negotiation, but don’t put your money on it. Closing costs come up to about 3-4% of the home’s price. So think about it, if you’re buying a $200,000 home, you will need about $6,000-$8,000.

You should acquire your very last ultimate disclosure form as a minimum 3 days earlier than final. Overview it cautiously for unexpected fee variations, and ask your lender to explain any expenses you don’t recognize.

Can you afford moving expenses?

Whether you pay a moving company to do the job or you provide dinner to a handful of your exceptional pals when they assist you, you’re going to have plenty of moving costs. You will need packing containers, bubble wrap, cleaning supplies, and more. 

Pad your move-in finances a bit so things cross as smoothly as viable, and don’t permit new-home exhilaration cause you to overspend on gadgets you don’t need right away.

Answering these questions can help you determine if you are financially ready to own a home, but do not hesitate to call us! 

One of our RE/MAX Agents will gladly assist you with all the questions you have.

Author Rustom Marciano

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