The dream of home ownership can be a very scarey thing. But a majority of Columbia renters still say that buying a house is in their life plan.

 

And with good reason: home ownership is a key part of long-term financial strategies and a very important role in the health of the Columbia economy.

 

The recent struggles in the Columbia housing market has made one thing clear, home ownership is not for everyone. It is a significant, long-term commitment that requires strong financial standing and the right timing.

So before you make that commitment to cross over into home ownership, you should ask yourself a few thing.

1-Why do you want to purchase a home?

  Figuring out why you want a home is absolutely critical before you begin your home search. You should consider.

A-What’s the purpose of the home?

B-What do you want to do with it?

C-Are you going to live in it?

D-Are you going to rent it?

Asking these questions will determine what your next step should be and help to determine what kind of loan structure you’ll need and what size house makes the most sense given your answers.

2- How much can I reasonable afford?

Before you even think about square footage, or bedroom sizes , you need to determine what you can actually afford. That means getting a true financial picture; know your income, expenses, assets, savings, and debts.  Once you know where you stand, I  suggests sitting down with a financial advisor to discuss ” cash flow on a monthly and quarterly basis. Is it reasonable for us to purchase this $$$ much home or one that cost this much $$ ?”

The worse thing is finding your dream home only to discover that is way outside your reach.

3- Know all the hidden cost.

Mortgage (Principle & Interest) and down payment aren’t the only numbers you need to consider. Saying to yourself that it’s cheaper to buy than to rent, so I should buy a house. This may be true and logical but the problem arises when you fail to consider all the ongoing costs of home ownership.” 

A- Property Taxes

B- Home owner’s Insurance/Flood Insursnce

C- Private Mortgage Insurance (PMI)

D-Closing Cost

E-Utilities, and Maintenance

Some of theses fees can really add up. “So that $$ per month in mortgage can end up being a lot more when all the numbers a calculated.

4- Am I qualified for a loan? What type? 

Qualifying for a particular home loan depends on your financial history. Lenders will look at your pay stubs, employment forms, and tax returns going back two years, as well as your credit score to determine eligibility.   Many Columbia First-time home buyers will apply for Federal Housing Administration (FHA) loans, which requires as little as 3.5% down payment, or Rural Housing (USDA) which may offer 100% financing.

 

 Every mortgage is set up differently, but the more you can afford to put down the better,  because it will reduce your payments.

5- What will my life be like in the next 5 years?

Being financially ready to buy a home is not the only consideration. Making this commitment may not make sense given your current career path or relationship. 

A-Is there any chance of a  transfer?

B-Are you or your spouse, if you’re looking with someone else,  considering career changes in the near future?

 

Low interest rates can make purchasing a home a great investment right now, but is it something that you want to jump into? Columbia first-time home buyers should consider that purchasing a home is one of the most expensive assets they are ever going to invest in, besides maybe your retirement. It’s a major decision, and it should not be jumped into lightly.”

6- Are you ready to make a long term commitment?

If there’s any possibility that you might move within five years? If your answer is yes than I would have to say that, now is probably not a good time to buy. It’s true that Columbia Home prices are  seeing some nice stable appreciation. Even with that being said if you are going to be moving in less than 5 years you should also consider the cost of closing and reselling these cost could end up making it cheaper for you to continue to rent. Every market is different but staying put for three to five years is a good rule of thumb.

7- What kind of neighborhood are you looking for?

Being conveniently located by all the action is nice when you are young. But if you’re thinking about starting a family in a few years, you might also consider the quality of your local schools, access to public parks, and the safety of your neighborhood.

 

Start looking into the Columbia areas you’re interested in by checking out homes in your price range. I also recommend starting to look at least a full year in advance so you have time to check out as many options as possible.

8-Hire the Right Realtor

The Client/ realtor relationship is just like any other financial relationship; it’s important that you connect and that you know they will go to bat for you when you find the house you want. I suggests mini interviews with a few realtors to compare their work structures and availability. “Doing that due diligence right off the bat is going to save you a lot of time and make you more confident in your decisions.

 

One mistake many Columbia first-time home buyers make is choosing a realtor because they’re a friend or a relative. Your decision to hire should be based on a realtor who is knowledge; has the expertise and reputation in your area.

9- Is the rest of your financial house in order?

Columbia first-time home buyers should also consider whether they will be able to stay on top of all the other financial commitments in their life without going under. I always tell my first-time home buyers “You want to control the house, you do not want the house to control you”  You should not have to stop eating just because youwant to get this home right now.” you shouldn’t put yourself in a situation where you’re struggling. “So make sure you can manage all of your finances when you step into a major decision like this.”