Buying a home is one of the largest investments and most important decisions you’ll ever make. The pride of ownership and sense of belonging somewhere have been strong factors in motivating many households to own their own homes. In addition, there can be financial rewards from home ownership. As a first time homebuyer, it is important to have all the resources and information available to make the right decision.
Are you ready for homeownership?
Before you do anything else, spend a little time determining if this is the right time to purchase a home. You can use our Renting Versus Owning calculator to help inform your decision. Once you’re certain that ownership is the right option for you, weigh your property options. In addition to a single family home, a town home or condominium might be a better fit for your situation.
Now is a good time to buy
The housing market in many areas of the country is rebounding, and it’s a good time to buy a home. When looking for your new home, look at what’s been selling, and do a little research on property values in that area.
Tax benefits from home ownership*
Many taxpayers find that the interest on their mortgage and the annual property taxes they pay are large enough to enable them to itemize their deductions instead of using what is commonly referred to as the standard deduction. Be sure to keep track of when you pay your property taxes. Some taxing districts have due dates close to the end of the year, and you must have paid the tax before December 31st to get the deduction.
You may want to investigate tax advantages further or talk to a tax professional to completely understand the tax advantages.
How much home to consider
Buying and owning a home takes commitment and a plan. Deciding how much to spend for a home can be complicated. What you can afford depends on the size of your mortgage, mortgage rates, costs of home ownership, your other expenses and your income. One rule of thumb to consider is that the total of your mortgage payment, property taxes and insurance should be no more than 28% of your household income. To help you decide if you’re ready to buy a home, try our calculator, How Much Home Can I Afford?
You will also need funds for a down payment and any mortgage closing costs before you buy. After you buy, you will have monthly mortgage payments, property taxes and insurance, utilities and maintenance.
Ready to get started?
The earlier you plan for your first home, the better you can prepare. Once you have a savings plan in place for your down payment, check your credit score. It may have an impact on your loan options and mortgage rate. Here are a few commonly overlooked things you can do to make sure your credit score is stronger when you apply:
- Don’t take out any new debt.
- Make sure all your bills are paid on time.
- Clear up any financial disputes you might have, no matter how small or old they might seem.
Our experienced mortgage lenders have helped thousands of homebuyers move into their first home. To learn more, contact one of our South State Mortgage Lenders today.