Are You Deciding on the Time to Buy?

Are you ready to buy?
The best evaluation of your status is to poll your independent variables: current earnings, interest in staying in the same location long term, and financial history/credit score.

When calculating your resources for home buying, the general rule for lenders is that no more than 20% of your pre-tax income should be spent on a mortgage.
Why not pay more? Most people need a safety net and 80% after the mortgage is paid is used for things like property upkeep, insurance, food, health care, and discretionary spending like shopping for plants, clothes, and hobbies. If you are continually short on cash, it will eventually hurt your credit score or even cause you to miss mortgage payments.

Before putting down a big chunk of change on a home, think about your situation. Are you happy with the location and will you be for at least the next five years? Five years is the general time it takes to build equity. Selling before the five-year mark may cost hundreds to thousands of dollars. Is your job secure to the best of your knowledge? Suppose you are thinking about returning to school, changing jobs, or pursuing a relationship that may affect where you live. In that case, resolving any of these questions before buying your primary residence is better.

You may have a good idea of your financial history and credit rating. It is a good idea to order a copy of your credit report once per year through reputable providers like www.experian.com or www.equifax.com or www.myfico.com
Do you feel that the idea of homeownership is overwhelming? Advice is free and available so talk with people in the field. You don’t need to sign long-term agreements to obtain advice or to gather enough information to know if you would work well together and if the relationship would incorporate a good level of trust. If it takes several conversations and you have time, then talk with multiple lenders and multiple real estate agents. Be honest. Let each professional know that you are surveying providers and looking for information before committing.