Owning a home is the American dream. It’s both an achievement and a life investment. However, you’ll need to work hard to finally get your own place where you can build the life you’ve always wanted. While owning a home frees you from rents that don’t generate a return on your investment, you’ll have to shoulder bigger financial responsibilities that involve maintenance, taxes, mortgage, and property insurance, among others.
Given these, the decision to buy your own Kansas City real estate shouldn’t be done on a whim. These questions should guide you in determining whether you’re ready for such a move.
Do you have a positive cash flow?
The state of your cash flow is crucial in your ability to pay for a house. You can say you have positive cash flow when you’re earning more than you’re spending on daily expenses and debt payments. According to statistics, the debt-to-income ratio should not exceed 43%. Lenders take this into consideration when deciding about your financial ability.
To see whether you can add a mortgage to your monthly financial obligations, make a list of all your expenses and compare it to your earnings. If you can settle your existing debt payments every month and still have extra cash, then you’re probably a good candidate to buy a house.
Where would you get downpayment money?
If you’re thinking about taking it from your 401(k) or Individual Retirement Account, then you may want to reconsider buying a house now. Doing so is a mistake since touching those funds will affect your ability to retire comfortably. You would have to pay it back with post-tax money. The money for down payment should be more liquid. You can accumulate enough by opening a dedicated savings account, which is off-limits to all expenses except for the house you’re buying.
How stable and predictable is your source of income?
Job security is an essential factor in your home buying decision. Your income stream should be steady and predictable, so you’re sure you’ll have cash to pay for your monthly mortgage bill. If you’re still worried about losing your job, then you may want to hold off your home purchase until you find secure footing.
Can you commit to your property?
Once you have your own Kansas City home, you’d have to say goodbye to landlords fixing broken parts of your apartment and doing all the maintenance work of the building. Paying for the house is just the first step as you’ll have the responsibility of keeping it in good condition for life. This means supplementary expenses involving maintenance and any additions you’d want to have. If just thinking about replacing the roof scares you, then you might not be ready to own a house yet. Having your own property is an exciting journey that requires commitment on your part.
Are you into creating roots?
A person who frequently moves may not be able to commit to owning a house. While real property is considered an investment, it’s not the main reason why people buy their own homes. The purpose is to create a sense of stability in their lives. This means living in the same neighborhood for many years, creating roots and relationships. Otherwise, you’ll only be wasting money on a house you’re planning to leave behind within a year or two. Before you sign anything, ask yourself whether you’re ready to stick around regardless whether your house appreciates or not.
If you have positive answers to these questions, then you are close to having your own house. There’s still a process you need to go through, and working with reliable exclusive buyer’s agents is essential in finding your spot in Kansas City. An agency offering exclusive buyer’s agent services like T.J. Lamb Real Estate will help you remove the stress of searching for the ideal home, and may even help you enjoy your home search. Call us today at 816-224-4393.