Are you ready?

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StartI’m stealing today’s post from Ask Ross, a blog about all things mortgages. Here are his top 5 signs that you are ready to buy a house:

  1. You have a reliable source of income. Home ownership requires paying regular bills, and being prepared for unexpected expenses. If your income fluctuates wildly, you may want to save up a significant reserve fund before thinking about jumping into the market.
  2. You have saved a down payment. Do not – I repeat, do not – borrow your down payment. You should not be thinking about buying until you have saved up at least 5%, plus closing costs.
  3. You have a low debt load. A mortgage is a significant debt to take on. Be sure that other debts are paid out, or at least significantly paid down, before buying a house; at the very least, this will get you a better interest rate.
  4. You understand the numbers. You should budget for your mortgage payment, insurance, property taxes, utilities, and a maintenance fund, and add on more for emergencies. You always want to have more money than month, and home ownership can be more expensive than you think.
  5. You can get the mortgage on your own. If you need a parent or other relative to guarantee the mortgage, at least have a plan to get them off the mortgage quickly. Sometimes, especially if you are young, lenders aren’t sure if you are able to handle a mortgage. If you know that it’s just for the first five years, that is one thing, but don’t plan on having mom on title for 20 years so that you can have a house. That’s not fair to anyone.

You can find the original post here.

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