Is Buying a House in Your Financial Cards Right Now?

 When you’re considering buying a house, it’s likely you have two main concerns: money and time. On one hand, you might not want to commit to an area fully before you’re sure it’s somewhere you truly want to live. On the other hand, though, you may be struggling with your finances and unsure of whether now is truly the right time to buy a home.

If you’re in the latter group, taking the time to consider your options is wise. Purchasing a home is a huge commitment, and it’s a dangerous step to take if you’re not financially prepared. With that in mind, here is a simple framework for deciding if buying a house is something you can afford now.

3 Questions to Ask Yourself Before Buying a House

1. Do you have an adequate down payment?

One of the largest factors that determines your preparedness for buying a house is the presence of a down payment. Most lenders prefer buyers to have a 20% down payment. A payment this large assures better rates and makes purchasing a home much less financially stressful. If you don’t have a 20% payment, you’ll likely still get a loan, but it may come at a higher cost. Consider this before you commit.

2. Can you afford monthly housing expenses?

Once you get a loan and hand over your first payment, you’re still not in the clear. You’ll still have to pay taxes and insurance, which may change on a regular basis. Because of this, it’s critical to ensure you’re prepared to pay your monthly expenses as well as your mortgage after you purchase a home.

3. Can you pay for these things without decimating your savings?

When you purchase a home, it’s important to leave some of your home savings intact. Sudden expenses, like maintenance and repairs, can damage your pocketbook, so it’s wise to prepare for them in advance.

Buying a House, the Smart Way

When it comes to buying a house, being prudent with your financial affairs is critical. When you take the time to ensure buying a house is something you can afford, everything else is more streamlined – from beginning to end.