Questions To Ask Yourself Before You Invest in Real Estate
For most people, buying their own home will be the largest and most important purchase of their life. Naturally, the prospect of being a home owner is attractive to most everyone. However, in some cases, it can be a real nightmare. Every day, people are losing their homes to foreclosure, going upside down on their mortgages, and being faced with more repairs than they can afford. Owning a home is not a right; it is something that requires a lot of work and planning. When buying a home, there are a few things that need to be considered in order to protect your investment, your future, and your quality of life.
Can I Afford This?
It’s easy to convince yourself that you can afford a high monthly payment when you’re looking at the house of your dreams. It’s important to remember that this payment is not going to be a short-term obligation. In most cases, mortgage payments stretch out for 30 years or more. Having false hope for your ability to make a payment that’s above your pay range is a horrible mistake. You can get an idea of what would be a reasonable monthly mortgage payment for your financial situation by calculating your debt-to-income ratio. Most lenders will recommend that your mortgage payment equal no more than 28 percent of your total monthly income. Your overall debt should be no more than 36 percent. Staying within this range and setting realistic goals will help to ensure that you don’t end up with a mortgage payment you can’t afford.
Is This Really For Me?
Will this home meet your needs? Just because the price is right, doesn’t mean that it’s the house for you. Consider your long-term goals. Do you plan to have a large family? A two-bedroom home may not meet your needs if you plan on having five kids. Are you planning on staying in the area for long? If you are unsure of whether or not you will be living there for longer than a couple years, purchasing a home probably isn’t the best idea. Make sure that the home you choose meets your needs and is located somewhere that you can see yourself living for a considerable amount of time.
Is It Worth It?
Have the home inspected before making a final decision. While some minor repairs are expected when buying a used home, an inspector can warn you about any major flaws in the property before it becomes your problem. Also, always consider the price ceiling of the particular area. Every neighborhood or location has a price ceiling. This means that no matter how nice the home, it will never sell for more than a certain price at that particular location. Make certain that the home you choose is not selling for a price near its ceiling. No matter how much you do to that home, you will most likely never make a profit on it, if you ever decide to sell.
Buying a home can be a full-time job. It is often a stressful process, but if you put the right effort in, you will get the best results. Never rush in and buy the first home you look at. Take your time to shop, ask questions, consider your options, and make the best decision possible. Can you see your kids growing up there? Do you like the school district? Is the commute distance reasonable? Can you afford it? While you may fall in love with a house on sight, it doesn’t mean that it’s for you. If it doesn't match all your criteria, chances are you will regret the purchase. Be patient, and you will find the perfect home for you.
Roger Mayhem writes about finance, health & more at www.homeequityloan.net.
For most people, buying their own home will be the largest and most important purchase of their life. Naturally, the prospect of being a home owner is attractive to most everyone. However, in some cases, it can be a real nightmare. Every day, people are losing their homes to foreclosure, going upside down on their mortgages, and being faced with more repairs than they can afford. Owning a home is not a right; it is something that requires a lot of work and planning. When buying a home, there are a few things that need to be considered in order to protect your investment, your future, and your quality of life.
Can I Afford This?
It’s easy to convince yourself that you can afford a high monthly payment when you’re looking at the house of your dreams. It’s important to remember that this payment is not going to be a short-term obligation. In most cases, mortgage payments stretch out for 30 years or more. Having false hope for your ability to make a payment that’s above your pay range is a horrible mistake. You can get an idea of what would be a reasonable monthly mortgage payment for your financial situation by calculating your debt-to-income ratio. Most lenders will recommend that your mortgage payment equal no more than 28 percent of your total monthly income. Your overall debt should be no more than 36 percent. Staying within this range and setting realistic goals will help to ensure that you don’t end up with a mortgage payment you can’t afford.
Is This Really For Me?
Will this home meet your needs? Just because the price is right, doesn’t mean that it’s the house for you. Consider your long-term goals. Do you plan to have a large family? A two-bedroom home may not meet your needs if you plan on having five kids. Are you planning on staying in the area for long? If you are unsure of whether or not you will be living there for longer than a couple years, purchasing a home probably isn’t the best idea. Make sure that the home you choose meets your needs and is located somewhere that you can see yourself living for a considerable amount of time.
Is It Worth It?
Have the home inspected before making a final decision. While some minor repairs are expected when buying a used home, an inspector can warn you about any major flaws in the property before it becomes your problem. Also, always consider the price ceiling of the particular area. Every neighborhood or location has a price ceiling. This means that no matter how nice the home, it will never sell for more than a certain price at that particular location. Make certain that the home you choose is not selling for a price near its ceiling. No matter how much you do to that home, you will most likely never make a profit on it, if you ever decide to sell.
Buying a home can be a full-time job. It is often a stressful process, but if you put the right effort in, you will get the best results. Never rush in and buy the first home you look at. Take your time to shop, ask questions, consider your options, and make the best decision possible. Can you see your kids growing up there? Do you like the school district? Is the commute distance reasonable? Can you afford it? While you may fall in love with a house on sight, it doesn’t mean that it’s for you. If it doesn't match all your criteria, chances are you will regret the purchase. Be patient, and you will find the perfect home for you.
Roger Mayhem writes about finance, health & more at www.homeequityloan.net.
