One of the biggest decisions of your life is when you decide to buy a house rather than rent one. You may have rented for several years because it just made sense. However, now you may be wondering if it’s the right time to buy.
The decision to buy is usually dependent on a few factors.
- Cash for a Down Payment
You will need cash for a down payment. Even if you qualify for FHA, you will need at least 3.5 percent of the cost of the house. Be sure you have this money saved up before you get too far into the process of finding a house to buy.
- Plans to Stay in the Area
Planning to stay in the area where you are is one of the biggest considerations. Most people will remain in a house for five years before selling, so if you believe you’ll be in the area for five years or more, you should consider buying a home.
- Want an Investment
When you rent, you are essentially just giving someone money. When you buy a home, you are investing your money into property. Even if it takes you 30 years to pay off your home, it will someday be paid off — and that is going to be a great investment for you.
- Interest Rate
The current interest rate is another consideration. This will factor into your monthly mortgage payment. Talk to your mortgage lender about interest rates. This will give you a better idea of your price range for a new home.
- Credit Score
Your credit score has a lot to do with whether or not you’ll be able to buy a house. If you have a good credit score, it will be easier to get a mortgage. However, if you don’t have a good credit score, you may not be able to get a loan. If you do, it may have a high interest rate attached, meaning you’ll have to pay more per month. There are steps you can take to raise your credit score.
Making the Decision
Take your time to think about the above factors. If you feel you are in a good position to buy, then go ahead and get to work to make that investment. A great place to start is by visiting Next Home Experience to get your questions answered!