With mortgage rates at historic lows, you might be tempted to dip into the housing market for the first time. You’re not alone. A recent study from Lowes found that 58 percent of current renters were considering buying a home because of low rates. As with any major financial decision, buying a home isn’t just about one thing. Here are some other factors, aside from great mortgage rates, to consider.
Think it Through First
Before you start browsing Zillow, think this decision through. Are you financially stable enough to take on the responsibility of owning a home? Remember: The mortgage is just the start. Owning a home comes with regular maintenance, closing costs, home inspection fees, possible HOA dues and more. Use an online calculator to see how owning a home will impact your finances. You don’t want to buy a home and have little wiggle room after the mortgage is paid each month. That will not be sustainable.
Get to 20
You’re going to want to have at least a 20 percent down payment on your house. This allows you to avoid paying private mortgage insurance and reduces the amount of interest you’ll pay on the mortgage. If you don’t have 20 percent saved, it might be wise to hold off on house hunting for now.
Don’t worry if you’re not ready just yet. As CNBC notes, these low mortgage rates are likely to stick around for a bit. The National Association of Realtors estimated that rates will hover around 3.1 percent for at least the duration of this year. There’s time. Make sure you’re prepared for the home expenses first, then log onto Zillow.