Cape Coral Florida's Real Estate Guide

Are you thinking about taking the plunge and buying a home in today's market? Well, you certainly are not alone. Determining if you are ready is difficult regardless of your status-currently renting, considering an upgrade or downsizing, or a first-time buyer. To help you in this daunting task, here are a few signs that may indicate that now is the right time for you to buy:

1. You've been keeping an eye on the real estate market.

If you've taken the time to become familiar with trends in your local real estate market, you've taken the first step to homeownership. Keeping tabs on how much houses are going for in your desired neighborhoods and having a realistic mindset when it comes to the cost of a home are necessary to move forward. Knowledge is power!

2. You've saved enough money for a down payment and closing costs.

Down payments are generally anywhere from 3 to 20 percent of a property's value and vary depending on the type of mortgage you select. Have you been saving toward the goal of homeownership? Additionally, you may be required to carry Private Mortgage Insurance (PMI) if your down payment is less than 20 percent. Some fees included in your closing costs are points, taxes, title insurance. Closing costs are typically 2 to 7 percent of the property value. Most lenders provide a cost estimate after you have applied for a mortgage.

3. You know how much house you can afford.

According to Freddie Mac, your monthly mortgage payment should be less than or equal to 25 percent of your gross monthly income. You must also take into consideration other bills and debt when determining what you can realistically afford. Another rule to follow: keep your debt to no more than 40 percent of your gross income to help ensure financial security.

4. You are prepared for the additional expenses that may come with homeownership.

Homeowners Insurance, HOA Dues and Fees, Water/Sewer/Trash....many of these expenses are included in monthly rent but that is not so with a mortgage. You will be responsible for these costs along with all maintenance on your new home. Being financially prepared for these expenses will ensure a pleasant homeownership experience.

5. You have made sure your credit is in good shape and ensured the accuracy of your credit report.

All lenders will view your credit history in order to determine your creditworthiness. Get a copy of your credit report from the three major credit reporting companies: Experian, Trans Union, and Equifax. Be sure these reports are reflecting accurate information and have any incorrect reports removed.

6. You have refrained from taking out any major loans, such as a car purchase.

When you make a large credit purchase prior to applying for a home loan, you reduce your chances of acquring a loan and/or getting approved for the amount you desire. Refrain from doing so and you will raise your chances of a successful home purchase.