Home ownership in the United States is often times considered the American Dream. The fact of the matter is that home ownership is not all fun and games. It is a huge commitment that requires more than just money.
Foresight and planning is required when it comes to buying your first home, among many other things. Before you jump into home ownership, here are a few things that you may want to consider.
Your Credit Score
A good credit score is everything when it comes to buying a home. Many people think that having credit cards is a bad thing but it actually helps you build your credit so that when it comes time to buy a home you will be eligible for better rates than if you were to have no credit.
A good credit score can mean hundreds of dollars per month in interest that you end up paying on your mortgage. If you are not sure what your credit score is, you can obtain a free copy from one of the three major credit bureaus.
Your Source of Income
Job stability is a major thing to consider when it comes to potentially buying your first home. This of course is not something that is easy to foresee but it should be at least considered before committing to a mortgage.
It is always wise to have an emergency fund built up in case of a layoff regardless of whether or not you are going to purchase a home. Another good idea to have another source of income from which to rely on in case of job loss.
In addition to an emergency fund, it is said that you should have at least 5% of the value of your home. It is more expensive than one might think to own and maintain a home. Aside from the routine maintenance, there are many variables when it comes to home ownership that you should be prepared for.
Cost of Living
Depending on where you live, it may actually be less expensive to rent your home versus buying one. Perform some research on the rental and real estate markets before making any further decisions.
You just might find that it makes more sense to continue renting. When it comes to home ownership, nothing goes further than a little preparation and foresight. If you aren’t prepared, having a plan of attack is a great way to reach your goals of home ownership. Do not rush a big purchase such as buying a home as it can lead to financial disaster if you are not prepared.