Are You Ready To Purchase Your First Home

Are you ready to purchase your first home?

As the market become more stable, many people are considering whether or not they are ready to

purchase their first home. This is a personal decision that should be based on your ability to pay back

a loan and the commitment that purchasing a home involves. Your decision should not be based on

interest rates or the reasonable asking prices for homes, Dean Graziosi recommends that you only

purchase a home when you believe you are emotionally and financially ready. Below are some tips on

how you can tell if you are truly ready to purchase a home.

• Budget – When you purchase a home you are going to be hit with a lot of new expenses. If you

do not currently use a budget to maximize your income, you should definitely start. A budget

will help you see where you stand financially and where your money is going each month. You

can also determine how much money you can then put towards maintenance and repairs should

you purchase a home.

• Down Payment – In today’s housing market, buyers are required to have at least a 20% down

payment on hand. Depending on the price of the home you are interested in purchasing, this

can be a rather substantial amount of money. There are options available for buyers, such as

a zero or low-down loan but these options may end up costing you more later in interest fees.

If you have the available cash for a down payment, then you are ready to begin looking for a

home.

• Income – Purchasing a home is long-term financial commitment, this means that you will need

a consistent income which will allow you to make your monthly mortgage payments. Buyers

should also keep in mind the additional expenses that come with owning a home. These

maintenance expenses should be factored into your monthly expenses. If you have a steady

income and can successfully make a monthly mortgage payment, you should consider yourself

ready to take on the expenses of home ownership.

• Debts – If you have been able to avoid accumulating a large amount of debt over the years and

have not large outstanding debt balances, you may be financially secure enough to purchase

a home. Properly paying and limiting the amount of debt that you have is a sign that you are

financially secure enough to handle the additional financial burden of a mortgage payment.

• Credit – In order to purchase a home you do not need to have perfect credit, but your credit

should be in relatively good shape. The better your credit is, the lower the interest rate you

may be able to lockdown. This can impact the amount of your monthly mortgage payment and

ensure that you can easily make the payment each month. You will also have an easier time

convincing a lender that you are worth the risk and that you will be able to pay back the loan as

stated in the terms of your mortgage.

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