Are you hoping to buy a home in the near future?
Buying a home takes preparation and it is important to make sure you are ready to make the commitment to buy a home.
The Lawhead Team would like to share some helpful ways to know if you are ready to buy a home:
- You’ve created a budget – When you own your own home, money management is a must. There will be unforeseen expenses and emergencies you will have to fork up money for. If you haven’t started a budget yet, start it now and make sure to use it!
- Save up for a down payment – For a conventional loan, you will need to save up 20% of the cost of the home. If you plan to buy a $400,000 home, you will need to have $80,000 saved up. If you haven’t started saving yet, start now!
- You can show a solid proof of steady income – It is important to make sure you will be able to not only afford the monthly mortgage payment, but also the extra little expenses that come with home ownership.
- You’ve created an emergency savings fund – This is on top of your down payment savings you’ve built up. Say a serious illness happens or an unexpected layoff. You will still be able to survive for a few months while you are unable to work because of your emergency fund.
- Your credit report looks good – Good credit history will help you get a lower interest rate on your mortgage while lowering your monthly payment. Check out your credit report to make sure there aren’t any incorrect marks before you go to buy your home.
- You can stay in the home for at least three to five years – That is usually how long you’ll have to keep the home in order to recoup any buying and selling costs. If you aren’t sure how long you can stay in the home you may want to wait to buy a home and rent for a bit until you know where you’ll be for three to five years.