10 Easy Kitchen Projects to Enhance Your Space

The kitchen is the place where we cook, entertain, do homework, and even surf the web. We want it to be functional, but we also want it to be stylish, too. Luckily there are some easy ways to tweak your kitchen to breathe new life into it. Consider the following simple projects to enhance your kitchen space.

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1. Reface the Kitchen Cabinets

Building new cabinets from can be an expensive and labor-intensive endeavor. You can make just as much of a difference by sanding and repainting the surface of your cabinets to breathe new life into them.

2. Change the Cabinet Hardware

Replace all those dated knobs and pulls with brand new ones. There are so many variations on the market these days that you can create a completely unique look to your kitchen with the simple change of your cabinets’ hardware.

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3. Install a Backsplash

You don’t have to be an expert to have an amazing backsplash. Consider peel-and-stick variations, or simply paint the space to change up the look.

4. Add Storage to the Backsplash

If you don’t like the thought of leaving your backsplash bare, consider using that valuable space for storage. Add a system that allows you to hang your pots, pans and utensils to maximize your wall space and expand your storage options. 

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5. Choose a New Kitchen Sink

Out of all the components in the kitchen, your sink is likely used the most. There are so many options available as far as style, size, width, depth, color, and material.

6. Swap the Kitchen Faucet

A faucet is very practical in nature, but it can also work wonders at enhancing the esthetics of your kitchen. Modern faucets have more features that make washing the dishes a lot more efficient while improving the looks of the space at the same time.

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7. Change the Countertops

Granite, marble, laminate, concrete, quartz, butcher block . . . the options are vast. A new countertop can make a huge difference.

8. Install New Lighting

Hang pendant lamps over an island, line the cabinets with under-mounted LED light strips, and swap old fixtures with more impressive ones.

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9. Add Seating

If you’ve got an island or a ‘peninsula’ in your kitchen, add some bar stools if space permits. It’ll make a great place for quick snacks and great conversations.

10. Create Charging Station

Everyone in the home has their own digital device these days. Instead of leaving a tangled mess of wires in the corner, come up with a creative way to house your devices while hiding their associated wires for a cleaner, clutter-free look.

8 Plants You Should Never Grow on Your Property

A home without greenery is a bare one. Landscaping is an integral part of the overall esthetics of a home, and plants are a key component. But while most plants are pretty to look at, not all of them are healthy or even safe in your garden. Some of them will invite unwanted insects to your yard, while others will just take over your garden completely.

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Before you start planting, make sure you avoid the following species. 

1. Yucca

The yucca plant might make a visually dramatic statement, but you’ll be spending a lot of time maintaining it. The pointy leaves will need to be consistently pruned and discarded once they’ve reached the end of their lifespan. It attracts plenty of insects, and the root system is very pervasive. If you plan on getting rid of the plant some time in the future, you’ll likely need to dig a large proportion of the area around it, which means any adjacent plants may be gone along with it. Yucca is best suited in planters inside the home so that it can’t intrude on other species in your yard, or attract lots of bugs. 

2. Bamboo

Bamboo is one of the fastest growing plants in the entire world. While it’s a wonderful resource for renewable and sustainable building materials, it’s not necessarily ideal for a residential garden. Within a short time span, your yard will be completely taken over by this tropical plant. Preventing invasion of bamboo to nearby plants is a real chore, and often involves taking extreme measures, like pouring concrete barriers. If you must have bamboo in your home, reserve it for large planters.

3. Mint

Having an herb garden makes it convenient and affordable to season dishes and beverages, and also wafts wonderful aromas within your home. But mint is best planted in containers, as its roots are aggressively obtrusive and will easily and quickly spread like a weed. 

4. Purple Loosestrife

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Purple Loosestrife is a perennial that quickly becomes impervious and chokes out native vegetation. For this reason, it’s dubbed the “Beautiful Killer.” Even if you decide to remove the plant from your garden, you’ll need to discard it carefully or it will continue to spread no matter where you dump it. The best way to prevent its spread is to burn whatever’s left if it once it’s been removed, and wrap it up in a plastic bag before discarding it.

5. Weeping Lovegrass

With the frequent and devastating wildfires that have been engulfing many parts of California over recent years, the last thing you want to do is add components to your yard that will make it even more vulnerable to fires. Weeping Lovegrass is just the type of plant to help spread wildfires and increase their intensity. This plant develops roots very quickly, and spreads like wildfire (pardon the pun).

6. Kudzu

This climbing vine is pretty, but it can quickly and easily take over everything in its path. It can grow as fast as one foot each day, and can even spread to your neighbor’s yard or across the street! Once it’s planted, it’ll take years of herbicide application before slowing and eventually stopping its growth. The primary roots of this plant will need to be focused on in order to make sure it never returns once it’s finally gone.

7. Leafy Spurge

One of the worst plants for your garden is the leafy splurge. For starters, this plant is notorious for invading space around other plants and flowers, and essentially just forces them out of the way. Not only that, leafy splurge also spits out toxins that make it nearly impossible for other plants and flowers to grow in its vicinity. Even after you’ve gotten rid of the plant, its seeds can remain in the soil for years.

8. Water Hyacinth

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This plant is popular in waterfalls, large bird baths and small ponds because of its ability to clean out any contaminants. However, it can also kill off other plants and even fish at the same time. If you want the same lovely lavender color in your yard, opt for a lilac bush instead.

Before you whip out your gardening gloves, make sure you’ve done some research into the types of plants and flowers that will do well in your yard, and avoid species that will do nothing more than wreak havoc in your prized garden.

Assumable Mortgage 101: The Basics

Most buyers have to take out a mortgage in order to pay for a home purchase. While taking out a new mortgage with a lender is the more common approach to take, there’s another option: taking over the seller’s mortgage.

It’s called an ‘assumable mortgage’, and it’s named so because the buyer essentially ‘assumes’ the seller’s home loan. Rather than applying for a new mortgage from the lender, the buyer assumes the interest rate, current principal balance, repayment period, and all other terms of the existing mortgage. The buyer then promises to make all future payments on the mortgage, just as they would had they taken out an original loan.

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Of course, the lender needs to approve such a scenario before the seller’s mortgage can be assumed by the buyer. While this arrangement might not be right for everyone, it can be beneficial for both parties in many circumstances. Assuming an existing mortgage can be easier and more affordable for the buyer compared to applying for a new mortgage.

Why Would Buyers Assume an Existing Mortgage?

One of the biggest reasons why buyers would consider taking over a seller’s mortgage is to benefit from a low interest rate. If current home loan rates are a lot higher than what the seller is currently paying on the existing mortgage, there’s plenty of money to be saved on interest payments. Even if rates are currently low, the buyer may not be able to secure a low rate based an unfavorable credit score.

Buyers can also save plenty of money on closing costs with an assumed mortgage. There are typically a lot of closing costs involved in a real estate transaction. For instance, no appraisals are needed, which typically cost a few hundred dollars. By assuming a seller’s mortgage,  closing costs like these can be significantly reduced, which means less money needed to close the deal.

Why Would Sellers Agree to Allow Buyers Assume Their Mortgage?

Considering the fact that there are fewer closing costs involved with an assumed mortgage, the seller can also benefit by potentially getting as close to the asking price as possible. After all, the buyer is saving a lot of money through cheaper closing costs and a lower interest rate. 

Sellers can also advertise the potential for an assumable mortgage at a favorable interest rate as part of the overall marketing strategy to sell the home. Since not all mortgages are able to be assumed, it could help the seller stand out from the competition.

Potential Drawbacks of an Assumable Mortgage

Before buyers decide to take over a seller’s mortgage, they will first need to find out if the entire price of the home will be covered by the assumable mortgage, and whether or not a down payment or additional financing will be required.

For instance, if the seller has an assumable mortgage of $200,000, and the home is being sold for $300,000, the buyer must come up with the additional $100,000. The remaining cost of the home will need to be borrowed from a lender at the current market rate, which will likely be higher than the one on the assumed mortgage, unless the buyer can come up with the rest in cash.

If another loan needs to be taken out, the two mortgage lenders will have to contend with each other. Many times different lenders won’t want to cooperate, and for good reason. If the buyer is delinquent on one mortgage, that could be a real problem for the other lender. The benefit of an assumable mortgage is also significantly reduced if the buyer has to take out another mortgage to make up the difference.

For sellers, a potential drawback may be the potential risk of being held liable for the loan even after it’s been assumed. In this case, if the buyer defaults on the mortgage, the seller could be left responsible for the amount that the lender could not recoup. However, sellers can effectively avoid this risk by releasing their liability in writing when the assumption takes place.

It should also be noted that the majority of conventional loans typically cannot be assumed simply because many banks don’t allow it. On the other hand, Federal Housing Administration (FHA) and Veterans Affairs (VA) home loans can be assumed. 

The Bottom Line

An assumable mortgage can make sense, depending on the type of mortgage, the difference in interest rates, and the disparity between the purchase price and the amount of the assumed mortgage. Before you consider going this route, you’ll need to chat with your lender to see if it’s even possible. If it is, make sure all the numbers add up, and you’re not putting yourself in a financially vulnerable position.

Sellers: How and When to Use Homebuyer Incentives

To successfully sell a home, sometimes you’ve got to pull a few tricks out of your hat. One way that many sellers are trying to sweeten the deal for buyers and speed the process along is to offer buyer incentives.

There are a variety of ways to make a listing and the overall deal more attractive to buyers, but sellers should use incentives appropriately. Not every type of incentive will necessarily work with every deal. You want to make sure that you’re not wasting your time and money. For that reason, it’s important to determine what type of incentive would work for the types of buyers that are looking in your area to make sure it works in your favor.

If you’re not getting the offers you expected despite your best efforts to stage your home and price it right, throwing in an incentive can be the link that makes the deal happen. Just make sure to keep these pointers in mind when offering homebuyer incentives so they work exactly the way you need them to work.

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Make Sure What You’re Offering is Legal

There are plenty of perfectly legitimate offers that you can entice buyers with: covering closing costs, buying down interest points, throwing in the furniture, and so on. But there are others that border on illegal.

Your real estate agent and lawyer will be able to help you determine what may be considered against the law. Take their advice before you choose what type of incentive to offer, and whether or not to use an incentive at all.

Use Incentives to Make Your Home Stand Out From Other Listings in Your Area

Unless it’s a super slow market in your area, you’ll likely be competing with other listings. Part of an effective marketing strategy is to make your home stand out from the rest. If you’ve done everything else to make that happen – such as having the home professionally staged inside and out – you might have to take an extra step to make buyers look in your direction.

Use Incentives to Compensate For Any Pitfalls in Your Home

It’s never OK to deliberately hide or conceal flaws in your home to buyers. That’s not only dishonest, it could also land you in legal hot water after the deal has been sealed. Sellers are encouraged to disclose any major flaws in the home before buyers put in an offer and agree to purchase at a certain price.

Flaws in a home can range in degree. They could be as minor as a cracked tile or peeling paint on the window sill. They could also be more expensive to rectify, such as an old roof or a furnace on its last legs. Whatever the case may be, you should be upfront about these flaws, and consider compensating for them through an incentive. That’ll help ease the sting of having to deal with such issues after the buyers move in.

Don’t Come Across as Desperate

The last thing you want to do is seem overly eager and motivated to sell. In some cases, offering an incentive might make you come across as desperate to get your home off your hands as quickly as possible. Buyers will pick up on that, and will act accordingly.

Maybe they’ll think that there’s something wrong with your home, and may avoid putting in an offer at all. Or perhaps they’ll think they’ve got the upper hand in the transaction, and will throw in a low-ball offer. Sometimes the offer of an incentive can backfire on you, so make sure you use caution before you decide to use them.

Don’t Offer an Incentive Coupled With a Price That’s Too High

Every seller wants to get the most money upon the sale of their home, but that doesn’t mean it’s OK to overprice the property. Not only is this greedy, it’s also unethical. It’s always a good sales tactic to price your home according to what the current market dictates. That way, you’ll be able to sell quickly and for as close to what your home is worth as possible.

If you’ve overpriced a home, don’t offer an incentive to offset the inflated price that you’ve listed your home at. Buyers these days are well-informed before they begin their house hunt, and with the advice of their real estate agents, they’ll know right away if a home is priced well over what it should be. By throwing an incentive into the mix, savvy buyers may quite simply be insulted, and gloss over your home altogether.

In addition to this being shady practice, it can also be dangerous for the overall market. Buyers who receive cash offers to pay for an overpriced home would then use that extra cash to get approved for a larger mortgage that they would otherwise not be able to obtain. Some experts have gone so far as to claim that such tactics like these were partly responsible for the housing crash.

Regardless of whether that’s true or not, it’s sound practice to list according to true market value.   

The Bottom Line

Incentives can work wonders at selling a home. In fact, they often can mean the difference between a sale and a stale listing. However, careful consideration needs to be made before you arbitrarily choose what to offer buyers. Along with all other aspects of selling a home, the decision to use a homebuyer’s incentive should be made with caution.

How Agents Use Comparable Sales to Price a Home

Selling your home? How much you list it for can make a big difference in the length of time your home sits on the market before getting any offers. Price it inaccurately, and you’ll either scare off buyers, or leave money on the table. Price it right, and you can sell in a short amount of time and get fair market value for it.

So, how much can you get for your house? The answer to that question can be answered by having a look at similar homes in the neighborhood that recently sold.

Checking out these comparable sales – or ‘comps’ – will give you the most accurate idea of the current market value of your home, and therefore how much you can likely sell it for. Comparables are crucial components in your real estate agent’s arsenal of tools when it comes to pricing a home correctly. Comparing your home with similar properties is really the only way to come up with the right listing price.

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Here’s how your agent uses these comps to find that magic number.

1. Choose Homes Very Similar to Yours

Comparable homes that are looked at need to be similar in the following categories:

  • Square footage
  • Home type – 2-story, bungalow, townhouse, etc
  • Home amenities – Pool, library, gym, etc
  • Lot size
  • Condition

There’s no sense in looking at what a 4-bedroom, 2-story home sold for if you’ve got a 3-bedroom bungalow, just as it would be futile to compare a home sitting on 2 acres while your lot is only 30′ x 110′ in a subdivision. The closer the features of previously-sold homes are to yours, the easier it will be to identify the right price point for your listing.

2. Focus on Homes in Your Neighborhood

In addition to comparing homes with similar physical features, it’s also critical to focus on properties that are close by. On the same block would be perfect, but somewhere in the immediate neighborhood is great too.

Real estate agents will first try to find homes that are located no more than a 1-mile radius away from yours. However, there are exceptions. For instance, there might be a home that’s very similar to yours and only a block away, but it might not make a good comp if it’s backing onto a golf course and yours overlooks an industrial complex. You might be better off looking at a house that’s a little further away but is nearly identical in every aspect, including its surroundings.   

2. Look at Sales No Further Back Than Three Months

Real estate markets fluctuate over time, and some are more volatile than others. In general, though, homes appreciate in value over time, with the odd dip in the market here and there. That’s why it’s important that only homes that were sold in the very recent past are looked at for comparison purposes. A property’s worth today will likely not be the same as what it was last year.

As a general rule of thumb, realtors only look at comparables that were sold no more than three months ago – the more recent, the better. If you’re looking in super hot markets like New York City or San Fransisco where sales move extremely quickly, however, you might have to look only at the last one or two months of sales. On the flip side, sometimes sales that occurred last year or even further back are still considered comparable to your property depending on the market and how unique your home is.

3. Find at Least Two or Three Comparables Sales

Real estate agents will try to find at least two or three homes that are very similar to yours in the above-mentioned categories. That way they’ll be able to get a better idea of the current value of your home. If all the homes sold roughly around the same price, you’ll have a better understanding of how to price your home.

If there’s a big gap between the sales prices of these similar homes, your agent will try to find out why. There are plenty of reasons for this. Maybe there was a major issue with the home behind the scenes that wasn’t detailed in the data, or perhaps the home was sold to a family member at a heavy discount. Whatever the reason, it might be necessary to look at more homes, go slightly outside the area, or go a little further back in time to try and gauge where your home’s value sits in the current market.

4. Look at Listing Prices Versus Actual Sales Prices

It’s helpful to determine how much of a gap there is between the original listing price of a comp and its eventual sales price. In slow markets, these gaps tend to be a little larger, while in hotter markets, there’s virtually no gap. In fact, many times homes sell close to – or even over – the listing price.

Realtors will look at the sales price to list ratio to help them gauge where your home falls as far as an appropriate listing price is concerned. For instance, if a home is listed at $300,000 and eventually sells for $285,000, the sales-to-list price ratio in this case would be 95% ($285,000 ÷ $300,000). Properties that are accurately priced according to current market data sell closer to their list price, and sell faster too. 

Obviously, a ratio as close to 100% as possible is ideal. Buyers are well-informed, and come into the game armed with up-to-date information about what homes in the area are selling for in the current market. They’re not going to pay more for a home than what other similar properties have been selling for.

Comps are considered the best tool to help come up with the right listing price of a home because they offer actual data to compare to. Finding out how much homes similar to yours sold for will give you the best idea of what the current value of your home is. They’ll help you come up with the ideal listing price that will help you sell your home faster, and bring the most money to the table.

Tips to Buying in Busy Urban Centers

The allure of downtown living is obvious: being in close proximity to work, shops, eateries, entertainment, and just about every other handy amenity is the height of convenience.

But along with the advantages of downtown living comes the tight living spaces, the sky-high prices, and even bidding wars.

Buying in urban centers definitely poses both benefits and obstacles, but if you’re well prepared, you can land the perfect abode without becoming house poor and losing your patience.

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Have Your Financials in Order

Before you even start pounding the pavement in search for a home, it’s critical that you make sure that you’ve got a good handle on your finances. Make a visit to your lender first to find out exactly how much you can comfortably afford, and how much of a loan you would likely get approved for.

Having a pre-approval letter in your hand when making an offer will help you get a leg up on the other buyers vying for the same property. In fact, most sellers in a hot market probably won’t even consider your offer without one. Once you’ve figured out your financials, the house hunt can begin.

Get Ready to Move Quickly

If you’re looking to buy in a busy urban city, be prepared to move fast. Homes are usually snatched up just as quickly as they’re listed. In larger centers that are a little short on inventory, the competition can be fierce. In situations like these, multiple offers and bidding wars are the norm.

That’s why it’s crucial that you come into the game prepared and armed for what lies ahead. You basically need to be ready to jump in full throttle without hesitation, which is why getting your finances in order beforehand is such an important step.

The buying process can be extremely fast in many urban centers across the country, such as San Francisco, Seattle, New York City, and so on. While some smaller cities might have markets that are more moderately paced, the larger housing markets tend to move incredibly quickly.

Adapting yourself to handle such a speedy, competitive housing market can help ensure that you don’t get caught up in an emotional whirlwind of putting in reckless offers that will cause buyer’s remorse the day after. Before you dive head-first into a hyper-swift real estate market, understand the mistakes you might be vulnerable to making, and what red flags to watch out for.

Find Out the Exact Market Value of Homes in the Neighborhood

Knowing the fair market value for specific homes in the neighborhood you’re looking in is critical before you get caught up in a bidding war. Many buyers fall head over heels in love with a home, and lose touch with the logic behind the prices they’re willing to offer the seller just to come out the winning bidder.

Before getting involved in such a situation, it’s important to find out what the true value of the home is, and set a limit as to how much you are willing to offer. Without this number in front of you, it can become easy to go well past your cap.

Not only do you not want to pay too much for the home, you also don’t want to risk being denied a mortgage because the home is not appraised at the amount you agreed to pay for it. Lenders will send in a professional appraiser to value the home according to current market conditions.

If an under-appraisal comes in, your lender will likely not approve you for the loan amount requested. For instance, if the appraisal comes in $50,000 lower than the price you agreed to pay, you will have to come up with the difference if the bank declines to provide you with more than the appraisal amount.

Be Open Minded About Various Neighborhoods in the Area

It’s easy to fall in love with a certain pocket in the city, but keep an open mind about other areas in the neighborhood. If there aren’t many homes to choose from or the listings are way out of your price range in the area you’ve set your sights on, you will be setting yourself up for disappointment when you can’t find anything.

Instead, keep an open mind about other neighborhoods in the city that are similar, and offer the same types of features and amenities, such as close proximity to shops and public transportation. Scope out each neighborhood to get a feel for each, and see how they would fit in with your lifestyle. By keeping a few neighborhoods on the list of potentials, you’ll be opening up yourself to greater opportunities and choices.

Factor in the Cost of Transportation

Living downtown is ideal for those who don’t have a vehicle and depend solely on public transportation to get around. In fact, one of the biggest appeals of living in urban centers is the ability to walk, bike, or bus it to work.

However, if public transportation is on the agenda, you should factor in the cost for such convenience. Homes in city centers tend to be priced at a premium for being so close to public transportation. You can offset this price somewhat by living along a bus route rather than being directly on top of a metro station, for instance.

And if you’ve got a car, you’ll need to park it somewhere, and that typically comes with a steep price tag. Parking in downtown cores tends to be very expensive, so it’s important to factor in these prices in the particular neighborhood you’re looking at before you decide to buy a home.

If the property you buy doesn’t come with a driveway, you’ll likely have to either rent or buy a parking spot. Depending on where you’re buying, you could be spending anywhere between a few thousand dollars in smaller centers to up to $100,000 in hotter markets like New York or San Fransisco.

Living downtown certainly has its perks, but just like any other buying situation, it’s important to go into the game fully prepared before you sign on the dotted line.

6 Signs That You’re Ready to Be a Homeowner

Ready to buy your first home? Join the millions of others out there who are navigating the waters of real estate for the first time.

It’s exciting, yet it’s completely intimidating at the same time, and for good reason. Your home is most likely the most expensive purchase you will ever make, so it’s not something you want to jump into without making sure you’re emotionally and financially ready.

Are you truly prepared for homeownership? Here are a few signs that’ll tell you that you’re primed to become a homeowner.

 

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1. You’ve Got Your Overall Debt Load Under Control

It’s important to be realistic about your state of affairs when it comes to your money. If you have mounting debt from credit cards, auto loans, student loans, and other personal debt, you should probably straighten these out before you add more debt to the pile. Including another payment will just send you spiraling deeper into debt.

On the other hand, if your debt is under control, you’re probably able to comfortably handle monthly mortgage payments. You can easily find this out by calculating your debt-to-income ratio, which represents the percentage of your monthly income that is dedicated to paying off your debts. If a huge chunk of your income is dedicated to paying debt, you might find it difficult to meet additional monthly mortgage payments. Not only that, lenders might not approve you for a mortgage either. 

Generally speaking, a debt-to-income ratio of 36% or less is usually considered doable. Anything over this percentage means you’ll probably be biting off more than you can chew. The lower the number, the more likely you’ll be comfortable making your monthly mortgage payments in full and on time each month.

2. Your Credit is Decent

Not only does your debt-to-income ratio affect your ability to secure a mortgage, so does your credit score. Do you even know what yours is? If not, it’s time to find out. Luckily, you can quickly discover what your credit score is by requesting a report from any one of the three major credit bureaus: Equifax, Experian and TransUnion. It’s free to get this report once a year, so there’s no cost to you.

Lenders will look at your credit score to help determine how likely you’ll be able to meet your payments, versus default on them. The higher your score, the better. If your credit score is at least 620, you stand a much better chance at getting approved for a conventional mortgage. You may be able to secure an FHA-backed home loan with a score of at least 580. However, your ability to be approved for a home loan will depend on other factors well, including the following.

3. You’ve Saved Up For a Sizeable Down Payment

Not only will a decent-sized down payment help your lender look favorably on you, it will also impress the seller. A bigger down payment means you will owe less on the principal amount of your mortgage. It will also help increase the odds of getting approved for a home loan, and score a better rate.

Depending on the type of mortgage you are applying for, you might be able to get approved for a mortgage with a down payment of 5% of the purchase price of the home. However, if there are some questionable factors in your financial history, such as dings on your credit report, you could be asked to come up with more.

There are actually some home loan programs that allow as little as 3.5% or even zero percent down payment, but specific guidelines will need to be met in order to qualify. Just keep in mind that anything less than 20% on a conventional mortgage will mean you’ll be paying extra for Private Mortgage Insurance (PMI), which basically protects the lender should you default on your loan. The more money you’re able to put towards your down payment, the less you’ll owe on your mortgage.

4. You’re Planning in Sticking Around

If your intentions are to settle down for a few years, then you’re probably emotionally ready to make the commitment. It’s important to keep in mind that the selling prices can be an expensive and lengthy one.

Selling your home in less than two years after buying it can potentially wipe out any real estate profits. You’ll also be slapped with tax implications from selling too quickly. The IRS allows as much as $500,000 in profits from the sale of a property to be exempted from capital gains on tax returns that are filed jointly, or $250,000 for single-person filings. But you’ll need to show proof that the home was your primary residence for at least two of the last five years in order to make sure that money is exempt.

If you’re not sure if you want to stick around for long, you may want to rent first. If, on the other hand, you have intentions of sticking around for the long haul, that’s a good sign that you’re ready for homeownership.

5. You Want to Start Building Equity

Think of your home as investment. In actuality, it is. You’re not only buying a home to live in, you’re also building wealth over time. Every payment you make towards paying down your principal every month and appreciation in value over time both contribute to growing your home equity. In fact, one of the biggest benefits of homeownership is the equity that you can build as time goes on.

Having a lot of built-up equity in your home can give you a lot of options. It’s somewhat like a forced savings account that just gets bigger over time. You can eventually use the equity to fund some of life’s major expenses, such as a college education, major home renovations, or even a once-in-a-lifetime holiday. Borrowing against the equity in your home affords you with a financial safety net. If you’ve got your eye on building equity, then homeownership is likely for you.

6. You Have a Reserve Fund Stashed Away

When it comes to owning a home, it’s not just your mortgage payments that you need to worry about. Along with homeownership comes all sorts of other expenses, many of which can pop up unexpectedly. It’s important to ensure that you’ve got a reserve fund on the side, preferably at least 6 months’ worth to cover the cost of your mortgage, utilities, insurance payments, credit cards, and other debt obligations. If you’ve got this money built up, you’re in a much better position to buy a home.

The Bottom Line

It’s much better to take the time to determine if you’re ready to buy a house before you seal the deal. Even though it might be frustrating to hold off on the big purchase as you answer these questions, you’ll be in a much better position to buy knowing that you’re fully ready to take the plunge.