As winter melts into spring, you’ll likely start to see “For-Sale” signs popping up in your neighborhood.
Buying a home can be an exciting milestone in your life, and it’s important to educate yourself on the financial implications of homeownership before you make an offer. Whether you’re a first-time homebuyer or a current owner looking to sell or refinance, there are a few key questions that should help guide your decision:
5 Questions About Homeownership
1. What are the pros and cons of owning vs. renting?
Owning a home is a long-term commitment. Recent studies show that the average buyer expects to live in their new home for 13 years before selling. While homeownership allows you to build equity and take advantage of tax benefits, owning also comes with risks.
2. Am I ready for the responsibilities of homeownership?
While property is generally considered an appreciating asset, home values are tied to economic conditions
. Having your financial house in order is an important first step to buying a house! Are you confident in your ability to pay your bills on time? Are you able to budget for unanticipated costs?
3. How much home can I afford?
Determining how much home you can actually afford goes beyond the list price of a property. Other factors that will affect your monthly payment include interest rates, taxes, insurance, income, debt, and future monthly expenses - to name just a few. While there are numerous “affordability” calculators out there, it’s important to first understand the whole picture.
4. How will lenders evaluate my mortgage readiness & make loan decisions?
Are you familiar with the “Four C’s of Loan Credit?” Lenders look at a number of factors to determine the terms of a mortgage loan.
5. How will my credit score impact my ability to buy?
Your credit score and the information in your credit report are key factors in whether or not you’ll be approved for a mortgage and at what interest rate. When was the last time you checked your credit?
No matter what stage of homeownership you are exploring, expanding your knowledge about the key financial questions to ask when buying a home will help you make a long-term decision that benefits you!
You can view all homeownership related content in Arbor Finacial’s Level Up Financial Success Program.
What's the next step?
Deciding to buy a home is a big step, but it doesn’t have to be intimidating. Knowing the questions to ask and things you can do to get started will help you make the decision that is best for you! At Arbor Financial, we’re here to help you navigate this exciting time and will always be just a phone call or click away.