Do you have a budget? And do you know how to use it?
Owning your own place comes with a slew of new expenses. So good money-management skills are a must-have. If you don’t have a household budget right now, you need to start one. Remember as a renter any maintenance issues that arise are taken care of financially by the landlord. However, when you are a homeowner, on top of your mortgage, insurance, and taxes, are you have to be ready and prepared to take on that financial responsibility. Having a clear understanding of your finances is necessary when you’re considering buying a home. Prior to speaking with a real estate agent, you should make a budget to see how much you can reasonably afford to pay. If you simply cannot afford the increased expenses that come with a house, it’s never a good time to buy, no matter what’s going on in the real-estate market.
Have you been saving? Do you have a down payment?
When buying a home you will have to get a loan and with getting a loan you will have closing costs and the down payment. You will have to come up with money up front, unlike renting where the deposit is minimal. Down payment amounts vary based on the type of loan you’re offered but remember that the more you put down, the lower your mortgage payments will be!
Do you have a backup or emergency fund?
Before you devote all your savings to a down payment, closing fees, and home upkeep, you need to take a look at the bigger picture. You need to build up your savings in case of financial setbacks that could cost big, like unexpected unemployment or serious illness.
Always remember it’s not just money that should affect your decision to buy a home…..
Happy house hunting! Please feel free to comment any of your questions.