Are You Ready For Homeownership?
First looking into luxury homes in San Diego is a major life step. The fact that you’re able to do this confidently generally means your future goals and current finances have hit a major milestone, to the point where you want a permanent residence of your very own. It’s easy to see why so many people get excited about this. However, we need to mention the fact that even if you feel that you’re ready to own a house, trying to do too much too soon can be a major mistake. Remember, buying a home is not just about the upfront costs, but long-term commitments and secret expenses. Here’s how to determine if you are ready.
The Financial Aspect
It’s an obvious thing to say, but it’s essential that you have a proper secure financial platform before you ever reach out to a luxury realty company in San Diego. This starts by making sure you have a large emergency fund in place. For homeowners, emergency funds play a variety of key roles. If you lose your job, they make sure your bills and mortgage will stay paid until you start working again. In other cases, they may cover travel or emergency care you need suddenly to keep from your payments being impacted. After all, you don’t want to suddenly lose the ability to pay your mortgage due to something you can’t control. As a basic rule of thumb, before you invest in a house, you want to make sure your emergency fund has enough money to cover 3–6 months of expenses.
We also need to talk about debt. Even if you do a decent job of saving money and have some earning power, having a lot of debt is likely to hurt your chances of qualifying for a mortgage. This is because every lender will take a look at your debt to income ratio when deciding whether or not to work with you. This helps them determine if you’re likely to actually make those mortgage payments each month. The ideal candidate in their eyes is going to be someone who has savings, steady earning power, and low debt when it comes to luxury home buying in San Diego.
This is perhaps best exemplified by a good credit score. Most of the time, you need to have a 620 score at minimum to qualify for most conventional loans. However, don’t be surprised if some lenders ask for more. In addition, if you have things on your record like a low score, collections debt, or declared bankruptcy, these may disqualify you from buying a house outright. If you’re concerned about your score, be sure to use one of the many methods available to look at your credit history and report. This lets you find potential issues before you discover them the hard way.
Let’s say that you get a report done and find your score is lower than 700. This likely leads to a lot of questions regarding why this is the case. In some cases, its multiple recent credit inquiries. In others, you may just not have the credit history to get your score up. You want to work on this, though, as it’s essential to help you save money in the long term by getting a lower interest rate on your home.
Chances are that money’s probably the thing that determines whether people are able to buy a home or not the most. However, that’s not the only thing. For example, many people are thinking about return on investment when they buy a home. However, you can afford a great house in a wonderful area, but have to pay additional thousands for things like inspection costs and appraisal fees. The result is that you don’t really break even until years afterward. This means that if you sell earlier, you may lose money in the long run.
This means that a permanent home purchase for someone making a temporary relocation generally isn’t a good idea, even if you can afford the upfront costs. Consider looking for alternatives from people who are buying short-term options for housing instead.
We should also talk about something that’s easily ignored when it comes to finances and other discussions. Are you, personally, ready to own a house? Moving from renting to homeownership is a big shift, like being responsible for your own maintenance and other things. For example, many housing experts recommend that you save an additional 1% of the home’s original purchase price to go toward repairs and similar tasks. Along with this, you’re not just spending the money as a homeowner, but the time. If you encounter an issue, you can’t just call the landlord and let them deal with it. You need to figure out what’s wrong, what contractors can take care of the issues, and facilitating the job. This may be more than what you want to deal with.
So, let’s say your finances are in order and you’re mentally ready. The next thing to do is talk about the type of home that you want for yourself. You want to take a practical stance here. Some elements are basic, like bedroom count, type of yard, and other factors. However, say you have permanent plans to raise a family. What’s the school system like? How long of a commute are you willing to deal with here? Also, if you’re moving with multiple people, they may all have their own input and preferences you need to keep in mind. Do you plan on moving again later in life?
Remember, home buying is one of the largest decisions most people make in their lives, so a measured approach matters. Don’t be afraid to delay the move if you’re not sure. Also, remember, when you are ready, you always have a luxury realtor in San Diego available to help out.