Sunday, July 20, 2014

Are you ready? - By Rick Yost

Buying your first home is a big commitment. It takes desire and stamina to work through the complicated and time consuming process. The responsibilities of being a homeowner are also challenging and can seem overwhelming. You know this, and yet you still find yourself on Trulia or Zillow looking at homes for sale in your favorite neighborhood, and maybe you have even tried to figure out how much you could afford to pay for a home. The big question is “Are you ready to buy your first home?”
Are you ready financially and emotionally to make the big commitment? Are you really ready for all that goes with home ownership? Are you ready to turn that rent check into a mortgage payment? There are some good signs that you are ready. Before you decide to take the plunge, consider the following.

Do you know that you are going to stay put for a minimum of five years? Owning a house on a short term basis rarely make financial sense. Your mortgage may be less than rent, but that does not truly consider the other costs associated with your home acquisition. Down payment, private mortgage insurance, and other closing costs add up quickly and drive the cost of homeownership up. The upkeep and maintenance has to be considered when buying a home and they also make short-term homeownership less attractive. If your job and your life will allow you to stay put for a minimum of five years, you might be ready.

Have you been pre-approved for a mortgage? Getting pre-approved is a quick and cost free process that lets you know how much home you can afford. This is also the time to find out what type of mortgages you qualify for. There are several great first time home buyer programs out there. You will also discover if you have any credit red flags that you should clear up. Being pre-approved also lets your realtor and home sellers know that you are serious about buying a home. If you are pre-approved to buy a home, you might be ready.

Are you flexible in your time frame? If your lease is up in a month, you are not ready to buy a home. Glitches and small problems hold up closing dates all the time. Closing in thirty days is not a sure thing. If you are not able to move for a year, you are not ready either. Housing and mortgage conditions can change dramatically in a year. If you are able to buy today, but are able to wait, you might be ready.
Do you have a nest egg? You need more than a down payment saved when buying a home. You will have closing costs, moving expenses, and home repair cost along with a down payment. The soft costs associated with buying a home add up quickly. Soft costs include new furnishings, window treatments, lawn mowers, etc. You will also want to have an emergency fund for unexpected repairs or financial setbacks. If you have a nice nest egg, you might be ready. 

Are you patient? The home buying process can be long and full of starts and stops. It can be frustrating, tedious and agonizing at times. Deals can go down the drain very easily. A bad home inspection, a bad appraisal, a deed issue, and more have all ended home purchases that I worked on this year. This leaves buyers unhappy and waiting for an issue to be resolved. Buyers are often forced to find another house. Patience is a major virtue under these circumstances. If you are patient, you may be ready.

If you have read this article and have answered yes to all the questions:

Staying put: Check
Pre-approved: Check
Flexible: Check
Nest egg: Check
Patient: Check
Then you may be ready.

Rick Yost is a realtor, a real estate author, and a long time Windham resident. You can contact Rick for all of your real estate questions and needs at

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