Buying your first home is a major step in your life. You may have been dreaming about this moment for many years. So, when the time finally comes, you are probably anxious to get it done.
However, emotions associated with purchasing a house can be very overwhelming. As a result, people tend to go overboard and make bad decisions because of the excitement. So to help you know what to expect and make a sound decision, here are four important questions you need to ask yourself before buying your first home.
1. Can I afford it?
Buying your first home is one of the biggest decisions you'll ever make and might impact your finances for some time.
Many factors come into play when buying a house. This includes income, interest rates, and the type of mortgage you get. Unfortunately, although you can opt for a fixed interest rate, your income, the economy, and other circumstances might change. So even if you can afford a more expensive house today, it might not be the same in the future.
So how can you know how much house you can afford?
One rule of thumb is the 28/36 rule. This rule states that your total housing expenses should not exceed 28% of your gross monthly income. And your total debt should not be more than 36% of your gross monthly income.
Knowing and sticking to these numbers would not only let you know how much house you can afford. It also ensures that you have enough for monthly repayments and other expenses such as tuition, medical, or entertainment.
2. How long am I staying?
Another factor you need to consider when buying a house is the time you'll spend living in it. Generally, it'll take five to seven years to break even on the cost of owning and purchasing a home. So if you're not planning to stay long-term in a house, you might want to reconsider your choices.
3. Does it have the amenities and features I want?
A house is not a home if it's a place where you don't feel safe and comfortable. So when buying a home, make sure that it's a place you actually like. Some of the features and amenities most homebuyers consider include:
4. Am I prepared for the out-of-pocket expenses?
Down payment is not the only price you'll pay when buying a home. There are other out-of-pocket expenses that you have to prepare for. These out-of-pocket expenses are usually 2-5% of the purchase price. They include the application fee, homeowner's insurance, property tax, and more. Additionally, you might also need to prepare some cash for a home inspection.
Homebuying is a huge investment. So make sure to consider all these questions before deciding on purchasing your first home. To know more about what's in play when buying a house, you can ask the mortgage broker at Ebenezer Mortgage Solutions. Schedule an appointment by calling (813) 284 - 4027 today.