Are you ready to get a home of your own? You may not want to rent any longer or just get out on your own.
However, if you have not previously purchased property, you may feel overwhelmed. Therefore, this is what you should know before you buy your first home.
Know the financial data
First, you need to determine whether you can afford to purchase the house. Budget your current bills. Determine what you can afford, including taxes, insurance, maintenance, HOA fees and utilities. Consider your interest rates in your house payment calculation.
Learn about your downpayment, closing and moving expenses. Then, consider any new furniture and household purchases you need to make. Also, calculate necessary renovations. Then, analyze your savings and income.
How a financial partner can impact you
You may purchase a home with another person, such as a spouse, sibling or friend. You can afford a larger place. Your partner’s credit and financial situation may positively or negatively impact your financing. Learn what the other person wants in a home and how long you both plan to stay. Then, set ground rules for a better experience.
Learn the credit requirements
Your interest rate and ability to get a loan depends on your credit, income, outstanding debt and time at your job. Your credit should also be above 700 and your debt load around 30%. Ask the bank about its required debt-to-income ratio. Work with a financier to determine your creditworthiness, and ask how to fix any issues you have.
Value of the house
Conduct an honest valuation on the house, and never make an emotional purchase. Things like remodels, appliances and updates can increase the value of a home, and you may pay more for a home you can grow into. Valuate your property as an investment.
