The idea of buying real estate in utah is certainly appealing. Many buyers feel like they’re simply throwing away their rent every month—they’re not putting it towards anything. Plus there are many limitations imposed upon renters by their landlords. Renters may not be able to have certain pets or change up the property as they’d like. But even though buying may look like a great option, before you jump in, you need to take a good, hard look at your finances to make sure you can afford to buy now. If you don’t, you may spend a lot of time and money only to find out that you just can’t make the mortgage payments you’d need to in order to afford a home.
Before you start thinking about buying a home, it’s important to remember that there’s more to it than just paying your monthly mortgage. You also have to pay homeowner’s insurance and property taxes, plus you may have to take on an additional utility or two—in some cases, things like the water and garbage bill is included in your rent, but that won’t be the case once you own your own home. You also won’t have the landlord to handle all of the problems, so be ready to shell out money for anything that breaks. You may also have to invest in a number of appliances upfront, including a refrigerator, a washer/dryer, and a lawn mower.
Before you jump in and start looking at homes, take a look at the different mortgage types available and see what you can qualify for. What are the current interest rates? Do you qualify for special first-time homebuyer discounts or loans?
Then look at your finances. Factoring in any increase in utilities plus estimating insurance and property taxes, what can you realistically afford to pay every month? How much can you get together for a down payment? What about closing costs? Sometimes you can stipulate that the buyer pays for all or some of the closing costs, but that’s not always a guarantee. Remember, your down payment could be as much as 20 percent of the property value.
Once you’ve done the numbers and determined that you can buy, it’s time to check your credit. Pull your credit report and look over it for anything that might negatively affect your chances of getting a loan. Make sure to deal with any errors on the report and get them wiped off before you go to a lender to get pre-approved for a mortgage. After you’ve evaluated your credit and your finances, if things still look good, it’s time to go look at houses!
