Mortgages are a hot topic that has captured the attention of people in recent years. These financial plans and burdens have become a huge turning point for deciding when people are ready to buy a house. Unfortunately, confusion and gatekeeping have been holding many possible homebuyers back from being able to make the purchase.
Here are some questions you can ask yourself that will help you answer that age-old question, “Should I rent or buy a house?”
What do you have for a downpayment?
This cost may be the largest deciding factor for how much you can afford. Your down payment decides what your monthly bills will look like and how much interest you’ll rack up. The average down payment is twenty percent of the total house price, but if you can pay more than that, it’s a good idea to pay it.
What do you make in a year?
How much money do you make in a year? The cost of the home you can afford fluctuates with this number, but you mustn’t try to buy out of what you can afford. This expense could leave you living house poor, which means you won’t afford much besides paying for your home. Go for something below what you can afford that still fits most, if not all, of your needs.
How long have you worked at your job?
Many don’t consider this a vital act when they’re house hunting, but you need to pay attention to this, especially if you’re planning on changing jobs soon. Many banks won’t consider someone if they’ve worked in their current position for less than five years. A long working history proves the stability and can give them a reason to trust you. Stick to your job for longer to ensure a better chance of getting the right loan.
What are your expenses?
How much do you spend a month outside of rent? Mark down how much you pay every month on your insurances, your car payment, child support, and any other monthly bill that comes up. If you get subscription boxes or spend a lot of money on online video games every month, write those down. Don’t be kind about your budget- be honest.
What’s your credit score?
The best credit score to have is anything about 700. If you’re at 640 or higher, your score is passable, but anything beneath that leaves you at risk of getting denied or having a high-interest rate that will make the house harder to pay for.
Are you married?
Being married to someone with a good credit score is like gold for home buyers. A good spouse means you’ll have more income, more reliable work history, good credit, and fewer expenses. This change can lead to a higher approval rate, a lower interest, and the ability to pay off your home sooner- or get a larger home. Although nobody should get married only to buy a home, homeownership is an excellent perk to tying the knot.
