Should You Buy a Home?
How do you know if you should buy a home?
Buying a home is the biggest investment purchase most Americans will ever make. And it can be very scary. But, buying a home is not hard, it's just a process and it takes some education, time, patiences and money.
It is true that mortgage interest rates are very low and that isn't likely to last very long. Interest rates change over time and often. While it is very difficult to try to time those rates, it is always good when the rates are low, because that means mortgages are cheap.
When money is cheap, buying a home can be a good investment for any family, under certain conditions.
Ask yourself the following questions:
- Are you planning on staying put for at least 5 to 7 years? If so, buying a home may make sense for you. If you plan to move out of the area sooner than that, you are adding risk to your life because your home may not sell for a profit or quickly when you need to move. If you know you will be in the same place for 10 years, your house will likely appreciate in value. Over the last 70 years, home values have increased every 10 years.
- Do you have money saved for a downpayment and the buying process? You will need several thousands of dollars to put toward the purchase, pay for inspections, moving expenses, deposits, etc. Don't believe that you don't need cash on hand with "no money down" offers.
- Do you have a steady job? You will need to prove your income with W-2's and payroll stubs for at least two years. You also should ask yourself if you feel confident in your employment status. Loosing a job is the fastest way to foreclosure.
If you have answered yes to these questions, then your next step should be to meet with a banker to find out if you qualify for a mortgage or loan to purchase your home. Go to a few bankers in your town. One might say no, the other might say yes.
Walk away from the banker with either a letter of pre-qualification or a checklist of what you need to do to improve your credit rating so that you will qualify in a year or so. Bankers are generally happy to help you improve your borrowing power.
If you have a qualification letter, then it is time to call a Realtor in our area and start shopping!
Julie Boyd Cole is a licenses Real Estate Broker in Gainesville, FL.