It is a myth that paying rent is a waste of money, and that you should purchase a house as soon as you can afford the monthly payments. The truth about real estate is that renting for a season can help you save up money to pay off your debt, which can help in the future to have a more successful home buying experience. The dream of become a homeowner could turn into a nightmare if you are not financially stable before buying a house. It is important to be debt free and have some money saved up in case of hardships such as unemployment.
The other truth about real estate is that, it is very usual for people to overlook the positive things in renting. It is important to understand what comes with buying a home. People who cannot afford to purchase a house should not buy real estate. It is not just about having enough to cover the monthly mortgage, there are a lot other expenses that landlords take care of when you are renting.
Property repairs and maintenance are covered by landlords. Another benefit of renting is mobility, if you need to move out of town or to a different side of town, then it is easier to do so compared to when you are owning a house. Owners could end up with a property without equity and that takes too long to sell.
*Find an experienced REALTOR that can help you sell your house.
So what is the right way to do it? Ideally, using 100% cash to buy a house is the way to go, but that could be impossible for some or could take too long to accomplish. So if doing this seems impossible, then make sure to meet these three conditions before buying real estate:
- Make sure to be debt free.
- Save up enough money for emergencies, at least enough to cover 3-6 months of expenses.
- A large down payment will help decrease the monthly mortgage payments and the amount of money you will have to pay in interest. A minimum of 10% down payment is highly recommended.
Beware of predatory lending, they can tell say you qualify for more than you actually do and their interest rates can be ridiculously high. Work on your credit to secure a good interest rate and get a fixed-rate mortgage for at least 15 years.
Buying a house is a big dream, and we definitely want your dreams to become true. We care about you and we do not want your dream to turn into a nightmare, it is ideal that you work with a professional real estate agent that can help you prepare to buy or sell a house. Reach out to one of our RE/MAX Agents and start your real estate journey.