6 Ways To Know If You’re Ready To Buy A Home In Lakeland FL
If you have been renting for some time now and are thinking about buying your own home or if you’re thinking of moving up, read these six ways to know if you are ready to buy your a home.
1.You are familiar with the market. You know you’re ready to buy when you have been paying attention to how much the average prices of homes are in the area you want to buy in. But if you are dreaming of owning a big home in Lakeland Fl without having an idea how much homes in the area are going for, then you might want to spend some time researching about the market first.
2. Have available money to pay for down payment and closing costs. Down payments usually range from 3-20% of the home’s value. This percentage will be determined by the type of mortgage you will choose. If your down payment is less than 20%, be ready to pay for PMI or Private Mortgage Insurance. You should also set aside money for the closing costs, which generally cost 2-7% of the property’s value. Your lender will be able to give you an estimate of the closing costs after you apply for a mortgage.
3. You can afford the monthly mortgage. The general guideline is the monthly mortgage payment should be below or equal to a quarter of your gross monthly income. Your income, along with your debt and credit history, will be used by the lender to determine how much you can borrow. Your monthly expenses (credit card, car loans, housing expenses, child support, utility bills) should not be more than 30-40% of your gross income.
4. You are aware of any additional expenses of homeownership. This includes home maintenance, utility bills, homeowners insurance, etc.
5. Your credit is in good shape and your credit report is accurate. Lenders will review your credit history to determine whether you are qualified for a loan.
6. You haven't made any major purchases recently, particularly a car. If you have any, it could lower your chances of getting a loan or lower the amount you are qualified for.