It’s always fun to look at Lakewood, CA homes for sale—but are you really ready to buy one?
This simple test will help you find out if you’re ready to make the leap from renting to homeownership.
How to Know When You’re Ready to Buy a House
Ask yourself these questions:
o What is my credit score?
o How much money do I have in savings?
o What fits within my budget if I own a home?
o Which lender would give me the best terms?
o What neighborhood is right for me?
o Where will I find a Realtor® to help me buy the right house at the right price?
You may be ready to buy—but first, let’s take an in-depth look at how the answers to your questions will affect your decision.
What is My Credit Score?
Your credit score determines what terms a lender is willing to give you on a mortgage. The lower your credit score is, the less likely a lender is to give you favorable terms (like a low interest rate).
If your credit score is too low, lenders won’t even bother with you. (Need more info? Read How to Boost Your Credit Score to Buy a House.) Most lenders require a minimum credit score of 620 to consider you for a loan, but some have even more stringent requirements.
How Much Money Do I Have in Savings?
The traditional down payment on a home is 20 percent of its purchase price. If you’re buying a $400,000 home in Long Beach, you’re looking at an $80,000 down payment.
Fortunately, there are many loan programs that require far less than a 20 percent down payment. Even if you are putting down less than 20 percent, though, you’ll still have to factor in closing costs (which typically run between 1.5 and 3 percent of the home’s sale price) and how lenders consider your debt-to-income ratio when you buy a home.
What Fits Within My Budget if I Own a Home?
When you make the switch from renting to ownership, you’re not only taking on your mortgage; you’re taking on home maintenance, homeowners’ insurance, and repairs. Don’t forget real estate taxes, how much you’ll spend on utilities, and whether you’ll be spending more money on gas to get to work from your new home across town, too. It’s a good idea to take stock of everything you spend now and compare it to what you’d spend as a homeowner. If you can handle a change in your monthly obligations, you may be ready to buy.
Which Lender Will Give Me the Best Terms?
You have the right to shop around for mortgages to find a lender that will offer you the most favorable terms. Each lender has different criteria for judging an applicant, so it won’t hurt for you to call a few and see what they bring to the table. Don’t just consider interest rates, though; think about:
o Fees the lender charges
o Services that are included in your mortgage
o The lender’s reputation for customer service
What Neighborhood is Right for Me?
If schools are important to you, start your search in areas around those that are most desirable. If it’s essential that you’re close to work, begin looking at neighborhoods that meet that requirement. It’s usually a good idea to look at neighborhoods before you start looking at individual houses; that way, you won’t become attached to a certain home that won’t make you happy (or meet your needs) down the road.
Where Will I Find a Realtor Who Can Help Me Find the Right House at the Right Price?
Working with a Lakewood real estate expert who can help you through every step of the process is essential—and it all starts with an interview. You want an agent who’s going to answer your questions, explain the home-buying process as it unfolds, and negotiate with sellers on your behalf.
We can do that.
Call us at 562-882-1581 to tell us what you want from your new home. We’ll help you find it.
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