Home Purchase Mortgages
Why Buying a House Right Now Makes Sense
No matter what your living situation is, it's pretty common to feel like you need an upgrade to the old homestead. Whether you have your eye on extra bedrooms, a spacious lawn or more storage areas, everyone gets the urge to expand their living space every now and then. Here are just a few life events that might push you into a new home:
- You’re young, single and just got a promotion. You’re ready to give up renting and build equity in a home of your own.
- Your family is growing and you need more bedrooms to give everyone their own personal space.
- You’re an empty nester and you’re looking to downsize into a home that requires less daily upkeep.
- You just got married and want to move into a bigger home to give you both the space you’re accustomed to, including a dedicated home office.
- You had your first kid and need room to balance your family’s needs with your work-at-home responsibilities.
What You Need to Consider Before Buying a House
Homeownership is a huge commitment, especially when it comes to your ongoing finances. You need to be prepared to consistently make your mortgage payments in full every month. There are additional costs to think about as well, including your homeowners insurance, property taxes and any homeowner’s association (HOA) fees you might need to pay. Not to mention, it’s always a good idea to keep a rainy day fund just in case you need to make repairs.
Before wading into the real estate market, take an honest assessment of your financial situation and ask yourself these questions:
- Are my finances sufficient and stable enough to afford a monthly mortgage payment?
- Do I have enough saved up for a down payment? If not, have I explored any down payment assistance options that could be available to me?
- Do I have additional funds to cover closing costs and unforeseen repairs that may be needed after buying a house?
- Can I pay the extra recurring costs that come with homeownership, like routine maintenance, insurance and property taxes?
- Have I reviewed my credit score? Do I know how it can affect my interest rate?
- What is my debt-to-income (DTI) ratio? A low DTI shows a good balance between debt and income.
- Can I pay my monthly mortgage and have enough money left over to cover unexpected expenses like car repairs bills, child care and medical bills?
Depending on where your finances are, it may not be the right time to buy a house — and that’s OK! If that’s the case, take the time to pay down existing debt, save up for a down payment and get your finances in order. Trust us, the housing market’s not going anywhere.
Renting vs. Buying a House
Buying a house is pretty appealing if you’ve spent years dealing with landlords and spending a big portion of your income on rent. Both renting and buying a home have their merits, but these are the biggest considerations to weigh:
Cost
You need to put more money up front when buying a house, but locking in a mortgage rate today means your monthly payments won’t necessarily be dictated by the whims of the housing market later on.
Equity
Rent is a sunk cost. Aside from maybe your security deposit, any money you give your landlord is gone for good. On the other hand, every mortgage payment you make builds equity in your home.
Taxes
Homeowners need to account for property taxes in their budgets. But keep in mind that renters may still feel the sting when property taxes go up, albeit indirectly, through rent increases. On the other hand, there may be tax incentives for you to take advantage of as a homeowner.
First-Time Homebuyer Benefits
There are benefits offered to you as a First-Time Homebuyer. We will make sure you can take advantage to all benefits you qualify for.