It seems to come around quicker and quicker each month. It’s time (again) to write out your rent check. In your heart you are ready to move on, make the big commitment and buy your first home. But the real question is, “Are you ready financially too?”
If you can answer “yes” to these questions, you are probably ready to begin looking for a home.
1. Are you gainfully employed? Lenders and banks want borrowers who have been steadily employed for the past several years. This demonstrates your ability to earn a reliable income, something that helps assure them you will be able to repay the loan.
2. Do you have good credit? In addition to employment, lenders want to see if you make timely payments on things like bills, rent, credit card balances as well as other loans. They want to make sure you have a history of meeting your financial responsibilities. In addition, they want to make sure you don’t have too much debt. If you are weighed down with things like extensive school loans, credit card debt and expensive car payments you might be a less attractive candidate.
3. Do you have enough saved? To purchase a home you will need to have enough for a down payment and closing costs. To determine how much you need, see what homes are selling for in the area you want to buy. A typical down payment will be around 5 to 10 percent of the selling price. Closing costs, which cover things like legal fees, vary from 3 to 6 percent of the sales price.
4. Can you meet your monthly costs? You want to make sure that after all is said and done, your income will cover your mortgage as well monthly expenses like heating, electricity, insurance, etc. You should also factor in the cost of food, clothing, entertainment, and a reserve for unexpected expenses.
If you can answer “yes” to these questions, call 315-529-5566 and make an appointment. We can help get you started on the path to homeownership.
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