Are you ready to buy a new home this year or in the near future? Take time to make sure you’re prepared so everything in the home buying process goes as smoothly as possible. Buying a new home is one of the biggest financial decisions you’ll potentially ever make and the total journey from start to finish is filled with exciting moments. For all those planning to buy a new home in Birmingham AL, here are some good questions and answers that homebuyers may have when deciding if they’re ready to buy a new home.
Have You Compared Available Home Prices vs. Rental Rates?
Checking rental prices for apartments is generally easier to do versus calculating the cost of purchasing a home, which requires consideration of a few more things. Start using one of these comparison calculators when you’re ready to stop renting and start buying. Remember that you’ll need to factor in the costs of your mortgage principal plus interest, the required home insurance, projected annual property taxes, and any homeowner association fees. Lately, it’s become more or just as expensive to rent vs. buy, especially when it comes to the affordable prices and low mortgage rates available for new construction homes in Birmingham.
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Keep Renting or Ready to Buy? Better Long-Term Decisions
Another point to consider in the rent vs. buy comparison is the long-term benefit of building up wealth via homeownership. This comes with rising property values and increased home equity as you continue paying off your home loan. Insights from a 2010 Federal Consumer Finance Survey showed that a homeowner’s net worth was more often higher than those of non-homeowners.
Are You Ready To Commit and Become a Homebuyer?
One of the short-term benefits of renting an apartment is that you typically only commit to a lease for one year. Buying a home generally requires a longer-term commitment, so you’ll want to find a home and community you enjoy. You’ll most likely be living there for a while but you should feel empowered as you keep making your payments and work towards building equity in your home.
Do You Have a Home Maintenance Plan?
Maintaining and caring for your home will require some additional costs so include those in your projected annual budget. Beyond the expenses of interior decorating, you should plan to save and set aside approx 1-3% of your home’s purchase price each year for general repairs and upkeep. Of course, there are many things you can do yourself to save money but don’t forget to include the value of time when planning to DIY. Hiring a professional, skilled contractor instead can often be a better option for some homeowners. At the end of the day, preventative maintenance for your home, both inside and out, helps retain its total value and can lead to savings on repairs down the road.
Do You Have Some Savings Available?
If you’ve been thinking about or planning on buying a new home then we imagine you have some money in savings for this strategy. There are current home loans available for qualified borrowers that offer reduced down payment percentage requirements. Regardless of your down payment cost, you will also need savings or funds for closing costs, any required deposits, and emergency home expenses.
Have You Checked Your Credit Recently?
Go ahead and do this if you haven’t seen or requested a copy of your credit score in the past few months. There are several places online you can request your free credit report for printing or by mail. You’ll want to look it over carefully and check for clerical errors, possible omissions, or anything on your report that appears as a negative. There will likely be some associated costs if your credit report needs repairs or updates. This is money well spent when applying for a home loan as some banks and lenders require a minimum credit score of 580, while others require a 620 or higher.
How Much Can You Spend on a Home?
Most mortgage lenders offer a free consultation to help you discover how much you can comfortably borrow toward buying a home. We suggest you start online to see how much home you can afford. You’ll save some time and gain a better understanding of the budget related questions you need to answer. Next, talk to your family and friends about a mortgage loan professional they recommend. Trusted advisors are always a good thing. Ultimately, you will need to plan and develop your own budget toward calculating how much you can spend each month on a home loan payment. Don’t forget you will have other monthly bills to pay, plus you’ll want to have a little extra for savings and home maintenance.
Learn More, Then See the BEST
Your answers to these questions and further consultations with a Mortgage Professional and a trusted Realtor can help you make the right choice on your best next steps. From there you can determine if you’re ready to buy a new home in or perhaps you need to wait a little longer to become a homeowner. Talk to your mortgage and real estate specialists and when you decide you’re ready to buy a new home, we want you to come see the Tower Homes available in Birmingham. We’re building the BEST homes for you.
Source: Realtor.com
