Questions to Ask Yourself Before Buying A Home

Buying your first home can be one of the most important financial decisions you'll ever make. So, take the time to answer some questions that will help you make sure you're truly ready to buy a home. Then, you’ll be equipped to plan for this exciting, new step! 

1. What Are Your Reasons for Buying a Home? 

Make sure that your reasons for buying a home are realistic. Consider the oncoming monthly mortgage payments and house maintenance needed, plus other hidden costs. 

Do your research to find out if your reasoning is sound. If you're buying a house because you think it'll be less expensive than renting, for example, then you may want to reconsider your decision, because that isn't always the case. 

2. How Long Will You Be Living in the Area? 

The answer to this question may of course change due to circumstances in your life after you move into your new home. But ideally, you should stay in your first home for at least three to five years before you move again. This is because you will usually need to stay in the home for about that long to break even on your mortgage.

If you know you will be transferring to a new area for work or think that you will want to move to a larger home in a year, then it might be better to wait to buy a home. This delay will allow you to save up a larger down payment and may make it easier for you to afford the home you truly want. 

3. What's Your Housing Budget? 

If you don’t ask this question when buying a house, you run the risk of carrying a mortgage burden. 

To avoid that, don’t take on a mortgage with payments that are more than 25% of your monthly take-home pay. This includes property taxes, homeowner’s insurance and (depending on your situation) private mortgage insurance and homeowners association dues. For an easy way to see how these costs will affect your house-buying budget, consider a mortgage calculator.

4. Do You Have a Credible Real Estate Agent? 

Having a good real estate agent will make a big difference to making the process of finding and buying a house go smoothly. Look for a trusted real estate agent who knows the local market well and is able to answer any questions that you may have along the way.

Before hiring a real estate agent to work with, make sure they're a good fit. Interview the real estate agent and come prepared with a list of questions to ensure they can meet your needs.

5. How Are You Financing the Loan? 

Consider the length of the loan. You can normally choose a 10, 15, 20, or a 30-year mortgage term. Remember, the longer the term you choose, the lower your monthly payments, but the more you'll pay in interest over the life of the loan.

Do your research on the types of loans to ensure you're choosing the financing option that's best for you. Your loan officer should also be there to guide you and answer your questions you may have.

6. Are You Ready for the Responsibility?

Once you're a homeowner, you're responsible for many issues that a landlord normally oversees when you're renting. This can include tasks such as repairing  a furnace if it goes out or fixing shower heads. 

To prepare for this, you need to have a fund set aside for home repairs. Also make sure that you can afford your home insurance in addition to your house payment, as well as additional costs like buying new furniture or paint.

Bottom Line 

Now you know some important questions to ask yourself before buying a house. Do not give in to pressure to buy a home before you're ready. You can evaluate whether you should rent or buy each year until you feel prepared. There is a lot to consider, but get excited because buying a home is a big step into your future of financial freedom!