Dreaming of buying your first home? You can turn that dream into reality, as long as you’re financially prepared to do so. The tricky part is figuring out if you’re really ready to start searching for a new home.
You can join the ranks of first time home buyers if you meet the following:
- You stick to a budget: Being able to efficiently manage your finances is a big part of home ownership. Having a budget also helps you figure out how much of a home you can afford.
- You have enough for a down payment: You’re in good shape if you have at least 20 percent of the home price set aside for a down payment. Making this payment also means you’ll have equity in the early years of home ownership.
- Your income is steady: Having a reliable source of income will help you avoid struggling to make mortgage payments down the road. Think ahead, especially if you’re planning on switching careers or having kids, since these will have a big impact on your finances.
- You’ve saved for emergencies: You should have between three to six months of living expenses set aside in case you experience a loss of income from an illness or other other unavoidable situation.
- Your debts are manageable: Your debts shouldn’t exceed more than 38 percent of your income. These debts include credit cards, student loans, car loans and other sources of debt.
- You have good credit: The better your credit is, the lower the interest rate on your mortgage will be. Check your credit report, and clear up any errors on it to boost your score.
Looking for more advice for first time home buyers? Contact Donna Hatch for a full service buyer's representation!~
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