Buying a house is a major milestone and homeownership is a dream for many. That said, it is a huge financial undertaking that also entails long-term commitment.
Are you financially ready to purchase your own home?
Homeownership comes with hefty financial responsibilities, including making monthly payments to pay off your loan. But first, you must secure a mortgage loan.
During this process, a lender—usually a bank or some other financial institution—evaluates your financial situation to check if you are financially capable to cover the cost of a mortgage. This is especially important, since the high demand for homes often results in buyers making offers well above the properties’ asking prices.
To ensure the success of your mortgage application, assess the following:
- Your monthly income
- Your debt-to-income ratio
- Your savings
- Your credit score
If you find yourself to be in the red, it is wise to take a step back and postpone your plan of buying a home. Take the time to settle outstanding debt, improve your credit score, and bulk up your savings. Make sure you have enough to cover the down payment for a home plus other homebuying costs.
What is the neighborhood like?
Another thing that you should look at when deciding to buy a house is the neighborhood you want to live in. Knowing where you want to live helps you set your budget and your housing expectations.
If you have yet to decide, there are three important things to consider apart from price: access to public transit, school quality, and location. Depending on your lifestyle, you may want to live close to the city center or somewhere quiet and remote. Ease of public transportation improves your mobility. And even if you don’t have children, school quality can significantly affect property values.
Future developments planned for the neighborhood should also be factored into your decision-making process. These can similarly impact home values within their vicinity.
What is the state of the housing market?
Housing conditions change. Before you buy a home, know the market, and determine if it is the best time to make a purchase.
Consider if the market favors buyers or sellers. The former may indicate lower home prices and a healthy housing supply. The latter, on the other hand, may result in higher asking prices due to low inventory and high demand for homes.
If you are unsure where to start, work with a local real estate agent. They can help you understand the current market condition and find you properties that match your budget and lifestyle needs.
Find a local expert
Coldwell Banker Cascade Real Estate works with a team of local real estate experts that can help you find the home of your dreams in Wenatchee, Lake Chelan, Leavenworth, and Cashmere in Washington.