23/09/2011 10:40
Planning to Buy Your Dream Home
Are you looking to purchase your first home, but you don't know what to do first? The first step to owning your own home is to get a plan in place.
By planning ahead, you can be sure that you are ready to buy a home. Purchasing a home is a big deal. It is a stressful and emotional transition. But it can go smoothly with a little preparation.
First, you need to assess your credit. If you already have a good credit rating, then you are set. If your credit needs a little work, then you need to take the time to improve it. Your credit rating will determine how much interest you pay on your mortgage. A small increase in an interest rate can add up to tens of thousands of dollars over thirty years.
You can improve or maintain your score by simply paying your bills on time and using your credit wisely. The key is to have less credit than you can afford. A poor credit rating can mean that you will be rejected for your mortgage. You have to start working on your credit.
The second thing you will need to do is to start saving. You will need money for a down payment, closing costs and for repairs and maintenance after you own the home. Start a savings plan that will help you handle the financial burden of owning a home. You should be prepared with more money than necessary in your savings. This will cushion you from any surprises.
Create a budget to help you know how much you can afford on monthly housing expenses. A budget is simply an accounting of what you get in income and what you spend in expenses. Many online calculators will help give you a general idea of what an acceptable housing expense should be. But only you know what you spend each month, so you should look to your own spending to determine a final figure.
Be aware that there is more to owning a home than a mortgage payment. You will have property taxes, utility costs and hookup fees, maintenance, moving expenses, closing costs, homeowners' insurance and private mortgage insurance. These expenses can add up quickly and will hurt you if you aren't prepared for them.
You should also consider any increases that could occur from your new home. For example, you could be further from work, which increases your fuel expenses for commuting. If you purchase a condo, you will have association fees to pay each year. Think of all the extra expenses that will affect your budget.
Take the time to get help in planning to purchase a home. Whether you research the process over the internet or simply ask for family advice, you will find that knowledge is one of your most important tools when buying.
Owning your own home brings a lot of responsibility to you. If you are prepared, plan ahead and take your time, the process can be positive and rewarding. The most important thing is to be aware of all the possible factors, from securing a loan to paying for the home in ten years. Knowledge is the key.
