Buying a house is a lifetime investment and therefore there are a few factors you should consider. To avoid making a mistake, these are 5 questions you should ask yourself:
- Do you have money in the bank?
Mortgage lenders prefer working with homeowners who have enough money for a 20% down payment. However, if you invest more money in the down payment, your monthly payment will be less. Therefore, determining if you have money in the bank is the first step in becoming a homeowner.
- Do you have a lot of debts?
If you don’t have enough money in the bank for a down payment and you have numerous debts, you should not consider buying a home because you will end up stressing yourself or being foreclosed. You should try reducing your debts first to focus on buying a home with the little money you are making.
- Did you just start a new job?
Moneylenders like seeing stability and if you just started a new job you might not qualify for a loan. However, if you have been working for several years or got a promotion in the same career path, chances are high your credit score is good and money lenders will work with you. When you start a new job or you are on probation, you can lose your job at any time and this would lead to financial difficulty. Normally, money lenders do not like taking risks with people who have just started working.
- Do you plan on starting a new job?
If you are planning to start a new job with a better salary or working conditions, you are in luck because you can make monthly payments with ease. But, do you like the area you live in or are you planning to move after a few years? You don’t have to buy a home only to sell after a year or two (probably at a loss). Instead, you can rent an apartment and buy the house when you have made up your mind where you want to settle with your family.
- Will you still have some money in your bank after buying the house?
Finally, when you rent a house or an apartment, you rely on your landlord to pay for maintenance. This is not the case when you buy a home because you will have to cater for everything. Remember, you have a family to take care of, a life to live and other things to take care of besides paying the monthly payments. Ergo, you should have some money in your bank account. Who knows, you might encounter an emergency!