Do you think you are ready to buy a home? The process for a first time homebuyer can be frustrating. Knowing if you are ready is a crucial aspect before getting started.
How many of you have set a goal for your life, for example getting married by 25 or having a child by 30? Usually buying a home is incorporated into one of these timeframes. While buying a home seems like a natural progression in life, it isn’t one that should be entered into lightly.
Here are 3 factors to keep in mind when buying a home:
Age can be a controversial topic about when is the right time to buy.
“I’m already 28! Isn’t it time I buy a home?” Putting an age range on when to buy your first home can be a great goal, but do not let that hinder your purchase.
According to a recent study from Zillow, the average age of the first-time homebuyer is 33. The median household income is a shade under $55,000 and over half of first-time homeowners are single. All of these are contrary to what people are thinking. One of the toughest decisions you will have to make is when and where is the right time to buy.
Lifestyle is another important factor when planning on establishing your future.
Where are you in your career? Do you travel often? Can you be relocated easily? These are all things to take into account when thinking about buying a home. You should be in a place in your life where you are ready to settle down for a number of years.
A 2013 study from the National Association of Home Builders estimates that first-time buyers of single-family homes typically stay in their home for 13 years. This may seem like a long time, but remember, buying a home is a long-term commitment.
Finances are the biggest factor in deciding whether or not you should buy a home. This includes income, credit card debt, student loans, car payments, credit score and much more.
Saving money, keeping your debt to income down, and paying your bills on time are big keys when trying to obtain a home loan. Here is a quick list of the money you should have saved:
- On a typical $200,000 home, your down payment would be around 10%, unless you qualify for an FHA loan or a VA loan. That means you need to have $20,000 in the bank, just for the down payment.
- Closing cost is usually around 2% of your loan, roughly $4,000.
- You may have to put your home taxes in escrow, which could add another $1,000 to closing.
With these expenses, you should have at least $25,000 in the bank. As you can see the money adds up and understanding the process and best practices are key to making your first home purchase a success.
Teaming up with a great New Jersey or Philadelphia mortgage company will give you the answers you need to not only make the home buying process easier, but to have a partner to be there every step of the way.
Remember, age, lifestyle and finances are just a few of the factors to consider when deciding to buy a home. While this may seem stressful and easily pushed to the side, owning a home is one of the most rewarding and freeing things you will do. This is a place where you will build a family, raise your children, gather with friends, and build lifelong memories.