Friday, May 12, 2017

Are You Financially Prepared for Your First Home?

If you’re a tenant in a rented home, then chances are you’ve probably dreamed of breaking free from the shackles of your landlord and buying your own house. But there are many challenges, especially financial ones, that are probably preventing you from doing so. If you’re considering the option of investing in a home, then here are a couple of ways to help you prepare for the financial side of things.


Credit History

To afford a home, you’ll have to take out a loan in the future. If you want to be financially prepared for it, then you need to maintain a good credit rating as well. This should come as no surprise considering how much money you’ll potentially have to borrow. In order to get a good credit score, you need to make sure you’re not late for any payments, be they for utility bills or your rent. If you plan to buy a home together with someone, such as your partner, then both your credit ratings will be considered so you both need to have a great score. Improving your credit score can take a long time, so avoid decreasing it as much as possible if you want to have a better chance of securing a loan.

Home Loans

Not all of us make six or seven-figure salaries and are capable of affording homes with the money in our bank. Luckily, that’s why we have home loans to rely on. It’s almost impossible for the average person to have the hundreds and thousands required to purchase a home in a single lump payment which is why there are countless home loan services available. You can take a look at home loan comparison websites in order to get a better understanding of how much money you’ll need to borrow, and they’ll even give you advice on what type of home to look for to suit your budget. Keep in mind there are varying interest rates, but this is an inevitable additional expense unless you’re capable of buying a home in a single payment.
Stable Income

Lastly, you have to consider your current situation before you buy a home. If you’re getting an average wage, then you shouldn’t expect to be able to afford a luxury home. You need to stay within your budget and have realistic expectations before you go shop around for both a mortgage and a home. However, this is all pointless to consider if you don’t have a stable income. If the job you’re working at feels unstable and you’re fearing for your job security, then now is definitely not the time to look for a home. What you realistically need is a well-paying job in a company that’s doing well to even be considered for a mortgage. Alternatively, it helps if you’re working multiple jobs to ensure that even if you lose one, you still have some income. You could also run a business from home on the side to secure multiple streams of income in order to afford your first home.


xxo
Kim

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