Chris Gmyr

This is a great time to buy a home, but are you ready?

There are six signs of a home owner who is ready to buy. Buying a home is one, if not the, most important financial decision you’ll ever make. It’s a great move, but only if you’re ready for it.

1. Are your finances in order? This means that bills are paid on time, your consumer (credit card) debt is paid down, and you have a strong credit rating. Get a copy of your credit reports, and look for any errors or negative comments. Pay off old debts, and take the steps necessary to correct errors. Call the credit agency or the company reporting the debt to get the correction process started.
2. Do you have a down payment ready? Depending on your credit rating, you may now need as much as 10% of the purchase price of the home set aside for the down payment, even for a FHA loan. You still need at least 20% if you don’t want to pay private mortgage insurance. If you don’t have the money saved up, look over your budget for any extra money that can be set aside towards your new home.
3. Do you understand the market? You don’t need to know the specifics, but it’s a good idea to know what you’re going to be looking at. What are homes selling for? What can you expect for an interest rate for your mortgage? Learn as much as you can about buying, and your local market, before you start looking at homes. You’ll be better prepared when you finally start your search for a home.
4. Do you have funds set aside for payments or emergencies? If you’re buying a home, you probably aren’t planning on losing your job or facing a family emergency. However, it’s important to be prepared, just in case. You should have at least two or three months of mortgage payments set aside, outside of the money you have saved for your down payment.
5. Have you held steady employment for several years? Mortgage lenders want to see that you have a strong employment history. If you haven’t held the same job for at least two years, or at least a similar position in the same industry, you may have a harder time getting a mortgage.
6. Are you staying in the area? If you aren’t certain that you want to stay in the Syracuse area for at least the next five years, hold off on buying a home. While you can buy a home even if you are planning a move, it might not be worth the extra hassle.

If you can answer yes to all six questions, you’re well on your way to being ready for buying a home. If there are still areas you need to work on, do some research and start working on what needs to be done. Save up your down payment and emergency money, learn as much as you can about buying real estate, and get your credit score repaired. It might be hard to wait, but you’ll thank yourself later on.