If you’re considering whether or not to buy a Dallas home, you probably feel you are ready – but are you, really? A home is likely the biggest investment you will make, but if you jump before you are truly emotionally or financially prepared, it could possibly result in tough financial issues down the road.
Before you sign on the dotted line, be sure you are practicing responsible home ownership and that buying a home can be accomplished with financial confidence.
Here are three reasons you may not be as ready as you think you are to buy a home:
You haven’t reviewed your credit report. If you haven’t taken a good look at your credit report in a couple of years, it’s important to know that the status of your credit plays a huge rule in whether you will be approved for a mortgage loan. A study was conducted by the FTC in 2013 that found 5% of consumers’ credit reports contained errors – errors which could mean higher interest rates and a higher mortgage.
You have no “safety net” in place. Having little or no savings when you go into the purchase of a home is not a wise choice. You know you will have to put a down payment on the home (unless it is a VA loan), but there are other costs including inspections and appraisals. Even if you have enough tucked away to cover these out-of-pocket expenses, consider whether you will still be financially secure if the home is older and may need repairs in the future, or in case of an unforeseen emergency.
You haven’t prepared a budget. How much home can you afford? It’s important that you know for certain how much you spend each month, not only for utilities, the car payment, or in insurance premiums, but for groceries, gas, incidentals, school lunch money for the kids – every dime counts. Make out a budget so that you have no question that you can afford a home, and how much of a mortgage you can afford.
At Team Nelson, our real estate agents don’t want to scare you off from buying a home; in fact, that’s the last thing we want to do! We simply want those who are excited about buying a home to be 100% prepared so that you can enjoy your new home without future financial worries. For more helpful tips, come by or give us a call today!