STEP ONE: DECIDING TO BUY A HOME
Deciding to buy a home is a major undertaking.
If you’re thinking of buying a home, it’s essential to take the time to think about your motivations and determine whether you are ready to enter the real estate market. Some considerations include:
What are your personal reasons for moving or buying a new home? Do you need a larger home to accommodate a growing family? Is a shorter commute to work important to you? Are you emotionally attached to your present home, and will it be painful to leave? Being mentally and emotionally prepared is the first step toward a well-conceived and well-executed move to a new home.
Do you feel pressure to move now? Do you feel that you’ll be priced out by a rising market if you don’t buy now? Or are you afraid you’ll miss bargains in a troubled market? Are there financial reasons behind your decision to buy a new home, or have you recently become an empty nester? Review some of our helpful tips for how to research markets to help you decide how to proceed.
How long do you expect to own your new home? Buying or selling a home is an expensive and involved process. Closing costs alone can be consequential – for both buyer and seller, making a home purchase financially unattractive unless you plan to own the property for several years. Remember that you’ll face another round of closing costs when you sell, so your house will have to appreciate just for you to break even.
Do you have enough cash to fund the down payment and closing expenses? Can you comfortably afford the mortgage payments as well as taxes and insurance? Do you have any credit problems? Review our Affordability Guidelines to help you get the answers.