Are You Ready to Buy a Home?

Posted in: All Videos, First-time Buyers
By ExpertRealEstateTips
Dec 7, 2007 - 10:26:21 AM

I’m Ilyce Glink with and before you take the plunge, and start signing papers, you should ask yourself a few really important questions.

First, have you saved enough money for a down payment?

You can get a loan without having any cash for a down payment but your loan’s interest rate is probably going to be higher than the going rate.

If you want to get the best loan at the lowest fixed interest rate available, you should put down at least 20 percent of the purchase price of the house. If you can’t manage that, then you should try to put down as much as you can.

Next, how long do you plan to you live in this home you’re buying? Buying a home may not make any sense if you’re going to be moving again in the near future.

It’ll cost you about 10 percent of the home’s sales price to move, including the commission and any taxes you might pay on any profits. Plus any kind of taxes you’ll have to pay to the state or your local community as well.

Here’s the third question: are you financially ready to commit to home ownership?

Owning a home costs more than renting an apartment. This is true even if the mortgage costs the same as the rent you’re used to paying because you’ll have to pay homeowners’ insurance, real estate taxes and repair costs.

Finally, do you prefer to invest your cash aggressively? Some people would rather invest in the stock market or buy expensive toys like sports cars than buy a house.

The money you’d put into a home may take away from those other investments or toys you’re buying.