Buying a home is one of the most exciting events in your life and is likely to be the most expensive purchase that you will ever make. Before you make a commitment, make sure that you are ready.
Make sure you can afford the home. Here are some things to consider:
- Are you ready to be a homeowner? It is important to consider whether you have saved enough money for a down payment and closing costs in addition to your other debts. You must have job stability, a steady income, and a certain credit score to be able to qualify for a loan. You will be required to provide verification.
- How long do you plan on living in your home? Real Estate is not always an investment. No one can predict what will happen in the future with your local housing market. If you plan to sell your home in the next few years, realize that the property may not increase substantially in value. It may take a while to gain equity.
- What is your estimated monthly payment for the home? In addition to the monthly payment for principal and interest of the loan, you will have to pay taxes, insurance and possibly homeowners association dues. If your down payment is less than 20%, your lender may require that you pay an added expense for mortgage insurance. It is important that you understand and are aware of all of these expenses.
- What are the other costs of owning a home? With owning a home, you will be required to handle the maintenance and repairs and pay for utilities. Get familiar with the costs for items such as appliances, air conditioning units, windows, roof…etc. You will generally need to budget for repairs and routine maintenace of your home, especially if you buy an older home.
- What can you afford? You will want to be confident that you can make the monthly payments. A great start would be to have a financial plan and make a budget. Consider how many long-term debts you have such as car payments or student loans as well as credit card bills. Do you have a steady source of reliable income to pay your mortgage and other bills?
- Have you talked to a Lender? If you need to obtain financing, your first step toward homeownership would be to speak with a reputable Mortgage Lender. Your choice of a Mortgage Lender or Broker, as well as type of loan, will influence your settlement costs and your monthly mortgage payment.
After you answer the questions above, have you determined that buying a house is the right for you? If so, congratulations!
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