With the real estate market on fire, potential home buyers are snapping up property in the metro Atlanta area left and right. If you are ready to buy a home now may be the time to do it. However, it is important not to rush into the decision to become a homeowner. The following are three points to consider before purchasing a home.
Are you ready for the financial aspects of owning a home?
You may have saved a nest egg to put a good down payment on a home, allowing you to comfortably pay the mortgage once the home is yours. However, the mortgage is not the only cost associated with homeownership. Property taxes and homeowner’s insurance need to be paid. If something breaks and needs to be repaired, you will be responsible for the costs of the repair. For these reasons, some experts say you should have three- to six-months of living expenses in an emergency fund, in addition to what you plan on spending on a down payment.
Are you a spendthrift?
When is the last time you sat down and calculated your monthly expenditures? If the answer is, “It has been a while,” then now is a good time to examine how much you spend each month and where this money is going to. When you own a home, you will have to pay for utilities, food, car payments, student loan payments, clothing, retirement savings and all the other expenses that come with living. While you may be able to afford these bills now, you will also want to ensure you will be able to afford these bills after you purchase a home.
What is your credit score?
It is a good idea before pursuing a home loan to check your credit score. Lenders will want to see that you have good credit, that you do not have any outstanding bills and that your debt-to-income ratio is no greater than 43%. It is also important to remember that just because you qualify for a loan does not mean you have to take out the maximum amount you qualify for.
Learn more about the legal aspects of buying a home
The home buying process is not just a financial process, but also a legal process as ownership of the home will pass via contract from one party to another. It is important to have a good grasp on both the financial aspects and legalities of homeownership before buying, so you can make decisions that are in your best interests.