You drive past all of the "For Sale" signs with yearning, knowing that you would love to be a homeowner. You want a place to call your own, a place that allows you to enjoy your part of the American Dream. When you know your heart is ready to take the plunge and purchase a home, you have to also evaluate your financial situation. After all, buying home is one of the biggest financial decisions you'll make, so you'll want to weigh all of the options. In San Antonio, the market is heating up and home prices are on the rise. In July 2015, the median sale price of a home in San Antonio was about $200,000, and interest rates remain low. It seems like more and more people are wondering whether now is the right time to get into the market. How do you know if you are ready financially for this milestone.
You Have a Solid Understanding of Your Monthly Budget
Prior to purchasing a home or applying for a mortgage, you should establish a monthly budget and make sure it is realistic for you. When you own a home, you not only have to pay for your mortgage each month, but also a variety of other expenses. This includes homeowners' insurance, taxes, homeowners' association fees, and utility costs in your new home.
You Earn a Reliable Salary
In order to pay your mortgage each month, you have to have income you can count on. If you feel like you are established in your current position and you have identified the amount of money you can spend on your house payment, then now is a good time to purchase a home. The salary required to purchase a median home varies in each market, depending on the cost of living and the value of the real estate in that area. In San Antonio, for example, a home buyer should have a salary of roughly $48,000 per year to afford the monthly payments on a median-priced home.
You Have Enough Savings to Afford a 20% Down Payment
Most mortgage lenders prefer their home buyers to have a 20% down payment on their home. This helps you to put immediate equity into your home, and allows you to lower the monthly payment of the home you want to purchase. It is ideal to have a 20% down payment, but there are options available for home buyers who do not have access to a significant amount of cash. Lenders can discuss other loan types with you, but most of those loans will require you to pay for private mortgage insurance, or PMI, which increases your monthly payment.
You Know How Long You Plan to Live in Your New Home
The fact of the matter is, it costs money to buy and sell your home. In addition to commission fees, you also will pay for title fees, closing costs and a host of other expenses related to the real estate transaction. If you only intend to stay in your home or area for a year or so, it may not be the best time to buy. However, if you plan to spend at least a few years here, your investment could be worthwhile.
You Have the Ability to Repair, Update, and Upgrade Your Home
Before beginning your home search, set aside some cash for repairs and upgrades. It is recommended that you set aside 1% of the purchase price of your home each year for general maintenance.
If you feel like now is the right time for you to invest in real estate and discover the home of your dreams, then get in touch with Liz Petroff. Liz is an experienced real estate agent who understands the San Antonio market and its current conditions. She is dedicated to helping each of her clients with a patient approach of listening and understanding their needs, and guiding them through every aspect of the transaction from financing, to property search and valuation, navigating contracts, and negotiating in your best interest.