To Buy or Not to Buy That Is the Question

When it comes to buying real estate, first time homebuyers still have a lot of questions and concerns. The biggest one being, should I buy?  The answer depends largely on each person’s individual situation.

Let’s start by answering this question, can you buy?

How’s your credit history? Without getting overly technical, here’s what we’ll be looking for in general: you have a couple years worth of credit history – which can be credit cards, student loans, car loans, mortgages, etc. You pay your bills on time and you haven’t had a bankruptcy or foreclosure in the last 2-3 years.

Employment: many people assume they have to be on the same job for many years in order to get a mortgage. That’s a myth. We’ll be looking to see that you have a stable employment history but that doesn’t necessarily mean the same job. As long as we can see that your job changes resulted in improved earnings without any significant gaps in employment between jobs, you’ll be fine. If you’re self employed or you work on commission, you’ll need a 2 year history in order to use the income.

Down Payment: this is a big one. Despite what you may have heard, you do NOT need to have 20% down to buy a house. There are still loan programs that will allow you to buy a home with little to no money down. Most programs will require 3-5% down.

Assuming you have a decent job, decent credit history and enough assets to cover the down payment and closing costs, you CAN buy a home.

Now onto the bigger question, should you buy?

Here’s what you need to ask yourself to determine if now is the time for you to buy:

Are you ready to put down roots? Buying a condo or a home isn’t something you should do if you see yourself moving away in the next couple years or if you have concerns about job security.

If you are secure in your job and you don’t see yourself leaving the area for 3-5 years then buying is a good idea. There are tax advantages to owning a home and you may actually spend less to own a home than you currently spend on rent.