What is the Difference Between a Short Sale and a Foreclosure?

Here is how to get a great deal on foreclosures and short sales while heeding all the risks when buying a home.

Not sure about the world of foreclosures and short sales? Don’t worry. Here’s a rundown of everything you need to know to grasp the basics of foreclosures and short sales.

What Are Foreclosures and Short Sales?

A foreclosure is a process by which a lender is able to repossess a property when the borrower defaults on loan payments.

A pre-closure is the period between when the lender files the Notice of Default and when the foreclosure process is complete. If the home is sold during this period, the transaction is called a short-sale foreclosure (or “short sale” for short).

While both a short sale and a foreclosure result in the unfortunate event of the borrower not being able to stay in their home, a short sale allows a borrower to avoid the harmful effects that a foreclosure would have on their credit score.

How Can You Buy a Foreclosure/Short Sale Property?

There are fewer foreclosures and short sales on the market today than there were a few years ago. “Default notices, scheduled auctions and bank repossessions…are down more than 7 percent from a year ago,” according to RealtyTrac’sNovember 2015 U.S. Foreclosure Market Report™.

But if you’re a buyer, you can still find a great deal on a foreclosure or short sale, particularly if you work with an agent who focuses on finding these deals.

If you are interested in purchasing either a foreclosure/short sale property, talk to an agent who specializes in foreclosures and short sales.

What Are the Pros and Cons of Buying a Foreclosure/Short Sale Property?

Let’s start with the advantages.

Foreclosures and short sales are often priced below retail, which means that you can buy these properties for less than the cost of other comparable homes. Subsequently, your monthly mortgage payments will be smaller and you’ll spend less interest over the life of the loan.

Furthermore, you may build equity quickly, particularly if you improve or renovate the home. This equity increases your net worth, and you have the option of borrowing against this equity in the future if you choose.

Additionally, if you purchase a short sale, you’ll also enjoy the emotional satisfaction of knowing that you helped someone avoid foreclosure.

Although foreclosures and short sales can offer the buyer exceptional deals on real estate prices, there are some drawbacks.

Foreclosures and short sales often need renovations or repairs. It’s likely that the owner wasn’t able to maintain the property, which means that you might have to deal with deferred maintenance issues. It’s important to get a full report of the maintenance issues you might face. Ask your real estate professional if he or she can recommend a qualified licensed home inspector who can produce a full report for you.

It is possible that some foreclosed properties are vandalized while they’re vacant, which can add to these repair bills. However, this damage will generally be reflected in the pricing of the home.

Foreclosures and short sales are in shorter supply, which means there’s a lower likelihood that the property has all your wants and needs. You may need to compromise on certain features, amenities or desired location. You may also need to act quickly, as these opportunities can get snapped up fast.

For a short sale, the seller may be motivated to sell, but he or she may not be able to budge on the negotiation price due to the outstanding balance on the mortgage.

Short sales are notorious for their lengthy closing times – typically between 45-90 days. This is because the original lender needs to approve the sale. If you’re in the market for a quick closing, a foreclosure or short sale property may not be for you.

That said, however, the financial benefits of buying a foreclosure or short sale can be fantastic for homebuyers who are flexible and patient.

Did you know? Halloween and Home Sellers

Buying A Home Can Be Scary...until you know the facts

Many potential homebuyers believe that they need a 20% down payment and a 780 FICO® score to qualify to buy a home, which stops many of them from even trying! Here are some facts:
40% of millennials who purchased homes this year have put down less than 10%. 76.4% of loan applications were approved last month. The average credit score of approved loans was 724 in September.

How to Save on a Mortgage Payment Whether Buying or Selling

 In Trulia’s recent report, Rent vs. Buy: Roommate Edition, they examined the impact that renting with a roommate has in determining whether it is more expensive to rent or buy. The study explains:

“Since we started keeping track in 2012, it’s been a better deal to buy than rent in America’s largest housing markets – and for much of that time it hasn’t been close.”

It then goes on to ask the question:

“But does the equation change for renters who share their rent with a roommate?”

The report reveals:

“While the standard rent vs. buy analysis reveals buying is cheaper than renting in all of the nation’s 100 largest metros, this doesn’t hold true for those choosing between renting with a roommate and buying a starter home.”

It seems obvious that sharing the cost of renting your living space by taking in a roommate dramatically decreases your housing expense (which is exactly what the report concluded), but it got us thinking.

What if you purchased a home and took in that same roommate?

The savings you would gain by adding a roommate would also occur if you purchased a home. This presents an opportunity for a list of possible purchasers. Here are two examples:

1. The first-time buyer: As the report explains, many young adults already live with a roommate. If they purchased a new home, perhaps that roommate (or someone else) would be willing to rent a room in their new house. The rent could help offset the mortgage payment.
2. The empty-nester seller looking to move: Their home may no longer fit their current lifestyle. They may now be looking for something a little smaller with all the bedrooms on the ground level. These families may be able to open a bedroom to an older family member (parents, aunts & uncles, etc.). This would kill two birds with one stone.

A smaller, move-down home is almost impossible to find in the current housing market. If the seller-turned-buyer takes on a tenant, they could buy a more expensive home knowing that the additional monies needed to pay the mortgage would be offset with the additional monies they receive in rent. Secondly, the older couple (ex. parents) could get a housing option that probably far surpasses anything else available to them in the current market.

Bottom Line

Considering the concept of renting a portion of your house to be able to purchase the perfect home may make sense to many families. You will need to decide if it is right for you.

Dream Home

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The Cost of Renting vs. Buying a Home

Every market is different. Before you renew your lease again, find out if you can put your housing costs to work by buying this year!

5 Reasons to Hire a Real Estate Professional When Buying or Selling!

Whether you are buying or selling a home, it can be quite an adventurous journey. This is why you need an experienced real estate professional to guide you on the path to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 reasons you NEED a real estate professional in your corner haven’t changed, but have rather been strengthened by the projections of higher mortgage interest rates & home prices as the market continues to pick up steam.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true real estate professional is an expert in his or her market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

There are over 180 possible steps that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you achieve your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. After looking at the list of parties that you will need to be prepared to negotiate with, you’ll soon realize the value in selecting a real estate professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people who you will need to be knowledgeable of, and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the amount of time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to a study by Collateral Analytics, FSBOs achieve prices significantly lower than those from similar properties sold by real estate agents:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and on the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively and correctly price your home at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?
Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has his or her finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a real estate professional?

No matter how you slice it, I am thankful for your referrals!

6 Things to do to get out of debt and buy a home!

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The Benefits of Using Your VA Loan

Why Basement Kid Caves are the New Man Cave

Ever stubbed your toe on a toy truck? Tripped over a doll? Scrambled to hide the explosion of toys in your family room before company comes? Or maybe you’ve resigned yourself to your bedroom while your children and their friends take over the family room. Most parents, even the most organized ones, will likely answer a resounding, “YES!” If so, maybe it’s time to consider a kid cave.

So what exactly is a kid cave? Like the man cave and she shed, a kid cave is retreat, a room that reflects everything your kids love.  Whether it’s dress-up or drawing, soccer or Star Wars, you can give your kids a dream room. Ultimately, it’s a multi-functional space where your kids can learn, grow and play.  And, as far as basement remodel ideas go, this is one that’s sure to please the whole family.

Room to Play

Take note from the best man cave ideas: priority number one for any kid cave is room to play.  Depending on the age of your children, this can mean a range of things.  First, with your contractor, you’ll want to figure out the layout of the room, designate a play area and decide on its use.  It could simply be an open area, filled with your kids’ favorite toys and a table for art projects.

Of course, with this option the main challenge is how organize your children’s favorite toys. You don’t want your kids tripping over their toys, either! For the ultimate in clutter hiding, you might consider a closet.  Put the toys away and close the door. Easy! But if a closet takes up too much space or would make the basement layout awkward, you still have plenty of options. Built-in shelves are a decorative way to store your children’s most-prized figurines or Legos. Wall-mounted rods can hold super-hero suits or princess dresses, giving your kids quick access to become their favorite characters.  Storage cubbies are also an easy way to hide those tripping hazards. Your possibilities are as endless as the ways your children play.

Most importantly, be sure your storage options are kid-friendly.  Are your children particular? Can they organize their toys by groups? Or are they more likely to throw a range of toys into a larger bins?  While modular cube units look nice in catalogs or on Pinterest, they could just thwart your children from keeping the floor clear.  Think practical, not just pretty, when it comes to organization.

Of course if you want to skip toy bins altogether and take play time to the next level, you could create an indoor jungle gym, incorporating swings hanging from the ceiling, slides and the like. Talk about a killer way to beat cabin fever! For older children, take tips from the best man cave ideas: leave room for favorite game tables, like ping pong, pool, Foosball or air hockey, to name a few. Want to kick it up a notch? Indoor sports courts are the ultimate luxury for hard-core athletes.

After a heated ping pong battle or after some intense imaginary play or just after school, kids need a place to unwind, too.  A room to play must include a place to lounge.  So after you’ve designed your open play area, you’ll want to lay out the media area. While a comfy couch is key, so is media storage. If it’s within your basement remodel cost, consider built-in storage.  This custom option anchors a space, showcases treasured memorabilia or pictures, and tucks away mounds of media equipment when not in use. If custom cuts a little too deeply into your budget, modular units can give you the same customization without breaking the bank.

Room to Learn

While bedrooms and kitchens tend be go-to spaces for studious future leaders, they are not always the most conducive spaces for learning.  Kitchens, the hub of most homes, can get cluttered and noisy. Or perhaps your child’s bedroom isn’t big enough for a desk. Whatever, your reason, a designated study center is sure to be one of the most parent-approved kid cave ideas.  Whether you simply want space for a desk and books or you want a built-in to house all supplies and computer components, a study center is worth considering when thinking about basement remodel ideas.

Kids not studying yet? Create a book nook or a mini library, your child’s little corner of the kid cave where he or she can get lost in an imaginary world. Again, organization is key. Do you want standing book shelves or floating wall shelves? Or would you rather steer clear of the traditional book shelf and use labeled boxes to organize your child’s library? Finally, don’t forget to make it a place where they want to go. Make it fun.  Use a tent that hangs from a ceiling to make it special.  Create comfort with floor cushions or bean bags.  Hang string lights on the wall or ceiling to create a unique atmosphere.  With an enticing book nook, you’ll raise readers for life.

Room to Grow

Depending on the age of your children and the size of your basement, you may also want to consider how kid-centered you want your space to be.  What was an open play area when your children were 4 or 5 might need to change into a study center by the time your children are 11 or 12.  Primary colors may make for a fun-loving space when you have preschoolers, but by the time they reach late elementary school, the color scheme may seem childish. Be sure to give yourself some flexibility to adapt your space to your children’s ever-evolving needs.

If you have a large age gap between children, you’ll have to balance the needs of the younger ones with the older ones.  The younger ones, with all of their toys, certainly will need more storage, while the older ones need space for themselves and friends. Together with your contractor, you can ensure that the needs of all of your children are met, and that form and function unify in the ultimate kid cave.

Room for the Whole Family

Even if your main goal is a fun space for your children, don’t forget: it’s still your house.  You may want to ensure the kid cave is a space your whole family can enjoy together—you know, just in case your kids invite you to “their cave.”  For example, ensure that the lounge area includes room enough for your whole family to watch movies or play video games.

You can help make family game night a reality by designating a place for board games in the play area. It’ll give you a chance to teach your kids classics like Monopoly, Sorry and Uno.

Whether movie-watching or gaming, kicking back should be a breeze, and if you plan your kid cave properly, it will be.

Make it a Reality

Ready to turn some kid cave ideas into reality?  First things, first. Determine your budget for your basement remodel. Cost will determine how custom or how DIY you can go. It’s up to you to consider what you can realistically do and what you can afford.

Next determine the different uses for the space. Look to your kids for ideas here. They know what they like best and chances are their minds will be brimming over with different ways they can use a new space. And they have the best imaginations!

Then with a contractor, plan a layout for your basement. He/she will have experience to best organize the space according to the structure of your house and to make it flow for your uses.

Once you have a general idea of how the kid cave will be used, get inspiration for the details. Pinterest is a great place to start. Don’t forget to include DIY man cave ideas and general basement remodel ideas in your searches.  They can be good sources of inspiration for everything from themes and color schemes to storage solutions. And before you put those catalogs in recycling, thumb through those as well.  You never know what might get your creative juices flowing.

Finally, decide on the details.  Let your kids help out here. Go over a Pinterest board with them, if you make one. From color schemes to storage solutions to furniture, there are so many options, it can be overwhelming. Take your time here and have fun with it. Make planning the kid cave a family affair. Let the kids help you whittle your ideas down to what your whole family really likes.

The Ten Commandments of Buying A Home

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Can Halloween Help You Sell Your House? 3 Spooky Sales Tricks to Try Right Now

Halloween isn't just an opportunity to gorge on all things frightful or filled with sugar. It's also a chance for home sellers to scare up a buyer!

Because these days, home sellers need as much marketing creativity as they can muster up. Now that the summer home-selling fever has died down, people are beginning to hunker down for the holidays. In fact, statistics show that home sales don't pick back up again until spring. But if you have a home on the market, you don't want to wait months and months to make the sale, right?

That's where Halloween comes in: Every year, more than 41 million kids in the U.S. head out trick-or-treating on this holiday, trekking from door to door—many with parents in tow. In other words, Halloween is the one day of the year when you could have dozens of people visiting your house, no effort required!

So if you're eager to use this opportunity to spread the word that your home's for sale, check out these tactics to make that happen.

1. Turn your treats into marketing materials
2. Throw a Halloween-themed open house
3. Don't go overboard with your Halloween decor

It goes without saying that kids will happily take any treats you hand out at your door, and that parents will likely survey their haul (because, let's be frank, parents like candy too and are not above pilfering). So this scenario creates prime opportunities for some stealth marketing: Use these candies to carry the message that your home's up for grabs.

You can do this by attaching a small card or flier to your candy saying that your home is for sale, along with your address and contact info for your agent.

"The parents will see the item in the bag, see the name, and it's an item that will be lying around the house," notes Cliff Fraser, an associate broker with the Century 21 Bill Forman Team in Indianapolis.

If you're afraid this card will get chucked in the trash and you want your marketing material to stick around for longer, you can even print the deets on small toys like fidget spinners.

Or do you want something bigger, where you can post some nice real estate pics? Fraser suggests investing in quality fliers to post near the front door, so parents can grab them on their way off the porch.

Rather than just getting trick-or-treaters on your porch, why not lure them into your house? The way to do that is to host a Halloween-themed open house, where you invite home buyers to check out your place with the bonus of giving them an excuse to celebrate all things scary.

You'll want to ideally host your open house on the weekend of or before Halloween, and set up some kid-friendly activities to keep the tykes busy. Think apple bobbing, pumpkin painting, or even turning your place into a haunted house! What better way is there to get people poking through every closet and corner of your home?

A Halloween-themed open house is also a great way to lure in home buyers who might not normally trick-or-treat in your neighborhood—so be sure to get the word out far and wide.

"Promote it on Facebook and the MLS," says Seattle Realtor® Aaron Hendon. "You can also have your agent send emails to all the local agents and have a broker's open house." That's an open house specifically for real estate agents, who can then chat up your home to their buyers.

First impressions of a home matter—by some estimates, you can increase a selling price by as much as 20% with some curb appeal improvements. You don't want to undo all of that with over-the-top Halloween decorating. Remember, you want to draw attention to your gorgeous house, not to the scary ghouls hanging from your trees.

With that in mind, stick to inoffensive (read, appealing) mums or other fall-themed plants on the porch, and maybe a pumpkin or two—provided it's not carved to look like Freddie Kreuger.

"Avoid the cobwebs, skulls, and witch stuff," Hendon says.

If you have your heart set on something spooky, Fraser says, you might want to move the decor away from the home and into the yard, turning it into an attraction that will draw more families your way. His suggestions?

"Set up an area where trick-or-treaters can get their picture taken," Fraser says. If your home's "For Sale" sign happens to be in the background, all the better.

Builder Offering to Pay Off Student Loans for Buyers

Millennials are on track to become the most educated generation in history. This means they are also the generation with the most student debt. Depending on the type of degree earned, as well as the prestige of the institution attended, there are some millennials who graduate college with what equates to a mortgage payment.

For those first-time buyers, and even some move-up buyers, who took advantage of the First-Time Homebuyer Tax Credit in 2008, there is an interesting program being introduced by Lennar Home Builders and Eagle Home Mortgage.

“Borrowers with Eagle Home Mortgage’s Student Loan Debt Mortgage Program can direct up to 3% of the purchase price (up to $13,000) to pay their student loans when they buy a new home from Lennar, one of the nation’s largest homebuilders. The contribution doesn’t directly increase the purchase price of the home or add to the balance of the loan.”

The program allows borrowers, whose credit and income requirements qualify, to put down as low as 3% and have a maximum loan amount of $424,100. At the time of closing, Lennar contributes up to 3% to pay down student loans incurred while attending universities, colleges, community colleges, trade schools and other certificate-granting programs.

Jimmy Timmons, President of Eagle Home Mortgage, gave more context about the reasons behind the creation of the program,

“Americans are more burdened than ever by student loans, with $1.3 trillion in outstanding student loans spread out among 42 million borrowers.

Particularly with millennial buyers, people who want to buy a home of their own are not feeling as though they can move forward. Our program is designed to relieve some of that burden and remove that barrier to owning a home.”

According to the Wall Street Journal, “housing observers said other builders are likely to look to mimic the program, which could help lure more of the critical first-time-buyer segment into home purchases.”

Bottom Line

If you are one of the many millennials who may have delayed purchasing your first home, or feel stuck in a house that no longer fits your needs, there are programs and options available to help you achieve your dream! 

Is This Home Energy Efficient?

Energy efficient homes reduce unnecessary energy consumption, greenhouse gas emissions and demands for nonrenewable resources. They simultaneously provide healthier living conditions and offer homeowners significant money savings over conventional homes.

One big reason millennials are buying homes? For their dogs

Millennials are now leading the pack of home buyers, and what’s one incentive driving them to take the mortgage plunge? Their dogs.

A recent survey conducted by Harris Poll on behalf of SunTrust Mortgage found that 33 percent of millennial home buyers’ decision to buy a home was driven chiefly by their dog. Furry friends outranked wedding bells (25 percent cited marriage as their top motivator for buying a home) and kids, too (only 19 percent said birth of a child was their prime incentive).

And even those millennials who don’t yet own a home but are planning to are prioritizing pups, with 42 percent of those surveyed by SunTrust saying a dog — present or future — is a key factor in their home purchasing decisions.

OH, THE INHUMANITY OF APARTMENT DOG-DWELLING

Certainly, this was true for 25-year-old Gwen Werner and her husband. They just bought a house so they could get a dog and not feel guilty about the pup being cooped up in an apartment all day.

"It felt inhumane having a dog live in a third-floor apartment without any space to run around," said Werner. "I'm glad that was our route, as we have a dog who has way too much energy for an apartment setting."

Werner adds that she and her husband bought their house in May. They rescued their pup, a German Shepherd mix in June.

The desire to give one's dog the best life possible is one that real estate brokers see frequently among their millennial clientele.

"All the time they mention their dogs," said Lee Fowler, a real estate agent with Coldwell Banker Triad in Winston-Salem, North Carolina, adding that just under half of his clients are millennials. "A lot of times they'll go into the house, through the kitchen, and then walk right into backyard and say 'This will work perfectly for my dog.' Or they'll look to see whether there's a fence, or if they can make one for their dog."

HIGH-MAINTENANCE POOCHES?

Sure, yards are great, but what about a dog-washing station? Millennials may also be on the hunt for a home that has deluxe amenities for their dog.

“Our sales center has found that millennials are particularly attracted to dog-related amenities,” said Marilyn Osborn Patterson, marketing director and legal counsel for Norton Commons in Louisville, Kentucky, which she says has about 1200 residences. "Demand has been really strong, so we just completed our third dog park. All of them include entry vestibules for safety, fresh running water, and seating for pet owners. Millennials favor parks and walking trails and an active lifestyle alongside their dogs, so we added pet waste stations to keep things looking good. In new home builds, we see a lot of people putting in dog-washing stations.”

It could sound a bit over the top. But it's actually not that ridiculous when you consider that millennials tend to regard their pets as family members — arguably more so than any generation prior.

Related: Social Media Users Post About Their Dogs Six Times a Week

"Millennials have grown up in a different world than boomers and Gen-Xers, and it has impacted the way they see dogs," said Laura Schenone, author of The Dogs of Avalon: The Race to Save Animals in Peril. "For one thing, this generation is more educated than any before: 27 percent of millennial women have a bachelor's degree, compared with 14 percent of boomers and 20 percent of Gen-Xers. There is research to show that the college educated are more aware of the environment and the natural world, which includes animals."

Perhaps it's the popularity of animal shows like The Dog Whisperer, or just being able to access so much information on the web — whatever it is, millennials have evolved past boomer thinking about what makes Fido a good boy.

"Back in the '70s, my parents thought they were being good and responsible [dog owners by using] punishment and choke collars," said Schenone. "Now, as behavioral science has advanced, we know that dogs respond better toward positive training and rewards-based punishment." 

Atlanta, GA: I am grateful to be your Real Estate Agent!

Pre-Approval Gives You Confidence

There are many reasons why you should get pre-approved. When you are pre-approved for a mortgage, it means a lender has determined how much you can borrow, the loan programs that you may qualify for, as well as the interest rate you qualify for. This assessment is based on things like credit score, income, debts, and employment history.

A Tale of Two Markets: A 6-Month Update

Six months ago, we reported that the mismatch between the type of inventory of homes for sale and the demand of buyers in the US was causing the formation of two markets.

In the starter and trade-up home categories, there were significantly more buyers than there were homes for sale, causing a seller’s market. In the premium, or luxury, home categories, the opposite was true as there was a surplus of these homes compared to the buyers that were out searching for their dream homes, which created a buyer’s market.

According to the National Association of Realtors latest Existing Home Sales Report, the inventory of existing homes for sale in today’s market is at a 4.2-month supply. Inventory is now 6.5% lower than this time last year, marking the 27^th consecutive month of year-over-year decreases.

Looking at the latest report from Trulia, we can see that not much has changed, and in fact, recent natural disasters across the country have made inventory conditions even more dire.

Trulia’s market mismatch score measures the search interest of buyers against the category of homes that are available on the market. For example: “if 60% of buyers are searching for starter homes but only 40% of listings are starter homes, [the] market mismatch score for starter homes would be 20.”

The results of their latest analysis are detailed in the chart below.

Nationally, buyers are searching for starter and trade-up homes and are coming up short with the listings available, which is leading to a highly competitive seller’s market in these categories.
Premium homebuyers, on the other hand, have the best chance of less competition and more inventory of listings in their price range with a 14.7-point surplus, which is creating more of a buyer’s market.

Bottom Line

Real estate is local. If you are thinking about buying OR selling this fall, sit with a local real estate professional who can share with you the exact market conditions in your area.

9 signs you can afford to buy a home — even if it doesn't feel like it

Buying a home is a big decision, both for your future and your finances.

And knowing if you're ready to become a homeowner comes down to much more than a number in the bank.

"The amazing, scary, exciting thing about buying a home is that it's a financial decision, it's a personal decision, and it's a life decision," says Jeremy Wacksman, chief marketing officer for Zillow.

If you've been saving up, but aren't sure if you're ready to start the process, here are nine signs you can afford to buy a home — even if it doesn't feel like it.

1. Your emergency fund is separate from your down payment

When it comes to buying a home, the more you have in savings, the better. But the money you're putting away for a down payment — typically 20% of the price of the home — should remain completely separate from your emergency fund.

"People will have money saved and they end up putting the entire amount toward the down payment to afford the home, and have no money leftover," says Eric Roberge, CFP and founder of Beyond Your Hammock. 

He warns that there are always added expenses when buying a new home, from random repairs to needing more furniture to fill a larger space, so your down payment should never drain your entire savings account. "Things are going to be more expensive, so you want to have a buffer for that."

2. You have more saved up than the bare minimum for a down payment

Unforeseen expenses always come up when buying a home. Closing costs alone, which can include anything from inspection fees to title insurance, can add an additional 5% to the final price of the home. It's better to have a cushion on your down payment than to find yourself digging into your emergency fund or being forced to step away from the deal.

"You can never have enough money saved in the home buying year," Roberge says. "The process itself is complicated enough without having financial difficulties."

First-time buyers are also 40% more likely to exceed the initial budget they set when buying a home, according to The Zillow Group Report. It's always better to have some wiggle room.

3. You know when to step away — and you're prepared to actually do it

With closing costs added on at the end, the final price tag of a home can be up to $10,000 more than you originally anticipated. Go into any negotiations with more than the bare minimum down payment ready, but know when too much is too much.

"You have to be prepared to write checks," Roberge says. "And really, you should understand how much you're willing to write versus walk away. You don't want to just be writing checks that you can't afford because you think you need to and you're all wrapped up in the emotions of buying a home. You need to have a specific plan and not sway from that plan."

4. You have a good credit score

Your credit score will not only determine if you can get a mortgage but what the interest rate will be, Roberge says. A low credit score can mean significantly higher monthly payments, which puts an obvious stress on your budget.

Credit scores can fluctuate, so it's best to check it early in the home buying process. (You can do so at a free site like Credit Karma or Credit.com.) If it's not in a good range, take some time to work on building it up.

5. You're not planning to move in the next two to five years

"Timeframe plays a big factor," Wacksman says. "If you're only going to live in an area for a short amount of time, renting can be advantageous."

If you're planning to settle in and stay for at least two to five years, it makes financial sense to buy a home, according to Wacksman. But if you don't see yourself putting down roots for more than a year or two, it could be a waste of your time and money.

6. You don't have any other big expenses on the horizon

It's important to consider your housing budget within the context of your future goals. "Keep in mind the next couple of years down the road and what you have coming up," Roberge says.

If you don't have any other big expenses looming, it will be easier to make paying off your house a priority. Consider this: If you can afford mortgage payments of $1,000 a month right now, but you have a baby next year, will you still be able to afford the same amount? If not, it's time to choose your priorities. 

7. You have your debt under control

Don't feel like you need to have every penny worth of debt paid off before you can purchase a home. But do a deep dive into why you have debt and how you're planning to deal with it.

"Why do you have the credit card debt? Was it just a random occurrence where you had to put something on the credit card and you know you're going to pay it off soon? Or have you been spending more than you make and it's increasing over time?" Roberge says.

If you're still on-track to pay off your student loans, you're probably in the clear to take on a big purchase like a house, but if your credit card debt is increasing, that's a red flag.

8. You understand your own finances

Real estate agents, financial planners, and mortgage brokers are useful resources to turn to in the house-buying process, and Roberge and Wacksman each recommend building up a team to assist you. But don't completely rely on them to know what's best for your personal financial situation.

"You need to consider, 'Okay, I've saved this much for a down payment, what can I afford from a monthly payment standpoint?' It's important that you calculate this on your own, because you might have spending preferences that a lender wouldn't take into consideration," Wacksman says.

"Do the math that you can yourself and then meet with a lender to go forward," he adds.

9. You want to buy a house for the right reasons

If someone asks why you want to buy a house and your first answer is something along the lines of "Because I'm wasting money on rent" or "Because it's a good investment," you might not be mentally prepared for all the responsibilities that come with home ownership. At the end of the day, buying a home isn't a means of getting rich. 

"When you look at the average price increase of a home across the country over the last 100 years, it's only about 3%," Roberge says. "If you take away extra costs plus inflation, you're not really making any money on average on a single family home."

It's smarter to look for a house that meets non-monetary goals: It's in your dream neighborhood or it's a good place to start a family.

"A home is a utility, not an investment," Roberge says.