Deciding to buy a house for the first time is a big deal. Though an investment, it is a significant financial commitment, which means you should assess whether or not you are ready before you sign any paperwork. Below are two portions of your life to consider before calling a real estate agent.
Are You Ready to Buy a House?
The Financial Considerations
Most lenders prefer a down payment around 20% of the home sale price. However, depending on your debt-to-income ratio and the type of mortgage you get, you can offer as little as 3% down. Be realistic about what you can afford as a larger down payment will lower mortgage payments. Check your credit score as this will impact your ability to get a low rate on a loan; most lenders want to see a score of at least 600.
You’ll also want to calculate how much you can afford for your monthly mortgage payments. Meet with a lender to get pre-approved for a loan and calculate the monthly payment for the amount. Add in the cost of homeowner’s insurance, property taxes, and maintenance. Maintenance typically amounts to 1% of the sale price per year.
The Emotional & Lifestyle Considerations
Choosing to own a home is a commitment, so you want to ensure you are emotionally ready. Consider whether you know which neighborhood you want to live in and whether or not you would live in the home for a while. Most real estate agents recommend you live in a home for at least three years to make it a smart financial choice. You also will not have a landlord to call for help with maintenance, so consider whether you are willing and able to put in the time to handle small repairs and take care of the landscaping.
If you have decided that you’re ready to buy a house, working with the right real estate agent is important. Colorado Sean – Resident Realty in Bailey, CO, is well-versed in the local real estate market and has built a reputation for his customer service. Sean can get you started looking at real estate listings that meet your budget and needs, and he will guide you through the entire purchase process start to finish. For more information about his process, check out his website. Contact him at (720) 277-1889 to get started.