Whether you’re still living with your parents or you’re tired of going from one apartment to another, it might well be time for you to consider buying your own house. Becoming a homeowner can be daunting for those who’ve never been locked into a mortgage. However, it’s a liberating experience to have a property that you can call your own. By planning and preparing to buy a home, you’ll make the transition easier and less risky.
Start Saving Up for a Down Payment
In order to reduce the amount that you pay for the mortgage each month, you’ll want to have a larger down payment. This can be a few thousand or tens of thousands of dollars that will pay off a small portion of the property. If you don’t have anything saved up right now, you’ll want to begin putting extra money into a special savings account. You can set up automatic weekly or monthly transfers and put any and all extra cash flow into this fund. Working a bit of overtime at your job or asking for a small raise can make all the difference on the road to becoming a homeowner. Additionally, there are many federal, state, and local government programs that offer down payment assistance. Often times these funds come with stipulations and limitations on household income. Simply go online and search out available options to you.
Secure a Stable Career
Foreclosure is a very real problem that many owners face after purchasing property. Unfortunately, if you’re locked into a mortgage that you can’t afford, you might start to miss payments and have trouble paying it off. The best way to prevent this from happening is to secure a career that is both stable and well-paying. By always having a skill you can rely on, it’s less likely that you’ll experience financial hardship when owning the house. This was a crux of the financial meltdown. Many homeowners were borrowing money on ‘stated’ income loans, and didn’t have enough money to cover the bills when job losses spread rampantly. It’s best to limit your mortgage payment to 30% or less of your monthly income. In the event of a job loss, make sure you have enough saved, or that your spouse can cover the mortgage with their income alone.
Get Rid of Debt and Costly Loans
Before you can think of getting stuck with a mortgage payment, you need to get rid of any old debts and loans that you might have. Those old student loans can be refinanced with a lower monthly payment and longer repayment terms by visiting this site here. If you have credit card debt, you should try to put more than the minimum due towards the monthly statements to get them paid off quicker. By getting rid of old debt and high-interest loans, you’ll have more cash that can be put towards the mortgage. Carrying unnecessary interest charges sinks the entire financial ship. Focus on paying down your highest interest debt first, like store credit cards. Then work your way down to the line of debt until it’s fully paid off.
Know What You Want
Sure, we’d all like to live in a huge mansion with a built-in pool, hot tub and wine cellar, but this just isn’t a reality for most people. You don’t have to go fancy when looking at properties and oftentimes, the simpler options are the cheapest. In fact, some individuals who are house shopping will look for fixer-uppers that they can work on while living there. These are often lower in price and will be less problematic for those who are on a budget. Even if you aren’t a handyman that can handle a fixer-upper, looking for smaller square footage homes that have the necessary updates you are looking for.
Consider a Different Location
It can be tempting to continue living where you’ve been your whole life, but this might not be the best for your own and your family’s future. Rather than look locally, consider broadening your horizons and checking out different towns, cities and states that offer better or more affordable housing. Generally speaking, larger and more well-known cities are often more expensive, so if you’re on a budget, you might want to look elsewhere. New York, Boston, and Los Angeles are fun cities that draw recent college grads and retirees alike. However, smaller cities like Columbus, Detroit, and Indianapolis have many benefits at a far lower cost of living.