Buying a house is a huge decision. As this is probably going to be your biggest purchase in your life, you need to take a lot of factors into consideration before you take that leap. But how do you know if you are ready to invest in Colorado Springs real estate and buy your own home?
Signs You’re Ready to Buy a House
There are several factors that would indicate when it is a good time to buy a home. These factors can be external (those that relate to the Colorado Springs real estate market) or internal (your personal considerations). To help you get started, these are some of the tell-tale signs that indicate if you are ready to start your house hunting.
Buying a home in Colorado Springs real estate (Image Source: Unsplash)
If you have a steady job, you are ready to buy a home. A secure financial source is the primary consideration that lenders use to evaluate your application for a home loan. Having a steady job will protect you during times of uncertainties and ensure that you have the financial capabilities to back up home ownership.
If you have a solid savings account and an emergency fund, you are ready to invest in a home. These two financial tools–savings and emergency fund–are important to secure your finances during times of need. They are also indicators that you do not rely solely on your paycheck in order to survive.
If it is aligned with your future goals, then you are ready to invest in a home. Are you starting a family? Are you looking to get married soon? Make sure that your future plans coincide with your decision to buy a home so that you won’t compromise either goal.
If buying makes more sense financially and practically speaking, then go ahead. There are some instances wherein buying a home would be more practical than renting. This is true if you intend to stay in a city for a long time.
If you are ready to settle down, then it might be the right time to buy a home. Buying a home is a big commitment not just in terms of your finances. It also means that you have to be committed to staying in one property in a given location for a long period of time. Consider this only if you are ready to stay put.
Questions to Ask
If the signs above do not give you a clear idea if you are ready to invest in your own home, these questions should give more clarity.
Are your finances in order?
Do you have credit card debt? Do you have other loans such as auto or student loans? This is not to say that you have to be 100% debt-free before you can decide to buy a house. But debt is often an indicator of a more serious problem--that you have a financial shortage. Before you make that big decision, it is important to conduct a close assessment of your financial health. If you are constantly chasing debt payments because you lack money, it might not be a good time to buy a house.
Your credit score is a good indicator of your overall financial health. However, you should have an idea of your financial status on a day-to-day basis. If you are unable to cope with your bills and other expenses, how are you going to pay for your house?
Can you afford the mortgage payment?
The most basic factor that you need to consider when deciding if it is good to pursue a home purchase is the cost of mortgage payments. The mortgage payment is calculated based on the value of the home plus the interest rate, and divided into the number of months for your loan term. The ability to pay your home in monthly installments should be considered a luxury. But if you are still unable to afford the mortgage payments, then you have to think twice about the decision to buy a home.
Are you ready to buy a house? (Image Source: Unsplash)
Have you saved enough for the down payment?
The down payment is the most expensive cost associated with purchasing a new home. The down payment is 10% or 20% of the home’s total value. There are some loans that do not require a down payment but you have to prequalify for them. A traditional mortgage loan will require you to settle the down payment as part of the loan requirement. It is important that you have enough money saved for this cost to qualify for the loan.
Can you afford the cost of home ownership?
The idea of having your own home sounds rewarding–and it sure is! But you have to look beyond the process and cost of applying for a mortgage to buy a home. You must also consider the cost associated with home ownership. For instance, you will be paying the real estate taxes and other maintenance needs. Unless you buy a brand new house, you can expect some leaks and other repair work in the home. Make sure to take these costs into account to help you decide if you are ready to buy a house. If you invest in Colorado Springs real estate, you should also consider the cost of living in the state (which is higher than most other states in the US).
Are You Ready to Buy a House?
If, after considering the questions and the signs above, you have decided you are ready to buy a home, turn to Brian Boals and his team of realtors. They are experts when it comes to Colorado Springs real estate and they know the best neighborhoods in Colorado Springs. Follow this link to get started on the home buying process.
If you are in need of a loan to finance your home purchase, we can help you with that, too. Our Remax agents have over 20 years of combined experience in the real estate industry. We make it our goal to facilitate your home buying process and streamlined it for your convenience. You may call us at (719) 459-9955 or email brianboals@gmail.com if you have questions.