Do you have big homeownership dreams for your future? Good for you. Dreams captivate you and keep you motivated towards your goal. Getting there, however, can be frustrating if not difficult to achieve. Fear not. There are ways to make your dreams a reality.
Do you dream of owning a home?
One of the goals of many generations is to become a homeowner. If that looks like an outsized task, break it down into more manageable pieces to accomplish.
Your first step will be to take an honest look at your finances. Gather all of the necessary paperwork to assess your monetary situation. Write them down in a journal, notebook, or make a spreadsheet. Do what is easiest for you so that you can maintain the momentum. Utilize bank and credit card statements, receipts, and track your income and outflow. Once you have done that, determine your gross monthly income. A general rule among financial experts is that you should only take out a mortgage for approximately 28% of your gross monthly income.
Now that you know where you sit financially, it is time to find the best property for you. Take note of these factors when searching:
Home size
Proximity to work or school
General location
Proximity to public transportation
Condition of home
Age of home
After finding a home, it is time to secure financing. Your next step is to contact a lender for mortgage quotes. Find a reputable company that will guide you through the process with care and efficiency. During communications, ensure a quote will be educational and informational only and will not pull a credit check. Working with a lender means you can create a customized plan to get you the best rates possible while working within your goals.
A few items to consider.
When you are thinking about buying a home, look at whether you intend to make any large purchases in the months or year beforehand. Smaller purchases will not impact your chances of getting a home loan, but a large purchase might prove difficult.
Having a car loan that you have paid on time for one or more years is a positive way to build up your credit and show potential lenders that you are a good risk. Choosing to purchase a new car via a loan in the month before requesting a home loan may show that you have the potential to overextend your finances. Whatever you choose to do, always do your due diligence and research your ability to pay your bills before applying for another loan. It is viable, however, if you are able to comfortably maintain that lifestyle.
An emergency fund is imperative as a homeowner. Some experts recommend having one set up before purchasing your home. Others say it is ok to fund it as you go along. Regardless of which mindset you subscribe to, it is an essential task to accomplish. As a homeowner, you will inevitably encounter major appliances that wear out, a water leak and resulting damage, shingles that need repair, and the list goes on. None of these things should lead to undue stress if you have an emergency fund to utilize when needed.
Here is a video guiding you on how to begin an emergency fund.
You worked hard to be a homeowner, take some time and enjoy the fruits of your labor. After you have moved into your new home, make it a cozy space that suits you.
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