6 Questions Home Buyers Need to Answer
By the time you finish reading this page, you'll will feel you are ready for buying a house. Discover the 6 basic steps to your piece of the American Dream.
The right of
home ownership is an integral part of the American dream but thankfully, does not have to remain merely a dream. Like most dreams, desire is important and is the first ingredient. If you have the desire to own a home, you have already satisfied the most important step to
home ownership.
Because your home is a financial asset, the desire for equity appreciation over time is certainly part of the dream. Besides gaining equity during some real estate cycles, pride of home ownership and financial security result from buying a house. These benefits are basic to our American heritage and are ingrained in our society. Our constitution providing freedom for home ownership, strengthens our country and makes us proud.
As much as we may like to avoid questions regarding our personal finances, buying a home is mostly determined by your current and expected prospects of financial ability and stability. Let's figure out if buying a house is right for you by reviewing some basic items.
#1 The first question regards income. Income should be consistent and dependable. A steady income refers to your income's consistency. The more consistent your income the better. The reliability of your income mostly refers to its predictability. What is the likelihood of your income continuing into the future?
#2 We all understand that your
job supplies the money. So the second question to determining if you are prepared to buy a home is related to
job history. You'll move quickly past the
employment issue if you have been in the same line of
work for over two years.
Tip: When a lender is looking at a loan application they are going to examine each of these aspects of your financial life. Popular misconceptions are that lenders are looking for reasons to deny you but in truth, lending is how these mortgage institutions make money. So don't feel intruded upon. Instead seek the guidance of a reputable mortgage lender to help guide you through this process.
#3 How you handle debt is extremely important to your financial health and is the third question to address if you are preparing to buy a home. Making payments on time is probably the single most important factor that lenders look for in a prospective home buyer. Make a conscious decision today to begin paying your obligations timely. Going past the due dates of your bills damages your credit rating but you can alter this behavior today.
#4 The amount of money owed is the fourth consideration for home buyers. In plain and simple language do you carry too much debt? Some people have large car payments plus high balances on credit cards. Other debts may include boat and recreation vehicles, installment payments for jewelry, furniture, and other items. Credit is easy to get but when qualifying to buy a house the volume of debt can obstruct your ability to get the house you dream about.
Tip: Zero down payment programs became the staple of home loan programs the last ten years. But due to the recent mortgage crisis, these products are not going to be as available.
#5 So the fifth question to ask yourself regards saving for a down payment. For those who have saved for the cost of buying a home including a down payment, they are a step ahead. It is never too late to begin a gradual savings plan toward a buying a house.
#6 The last issue is one some people don't think of but is also important to your overall financial life. Can you afford to make monthly payments plus the additional cost related to owning a home? Some of the expenses that occur are home owners insurance, property taxes, yard maintenance, physical upkeep, and various maintenance systems such as electrical, plumbing, heating and air conditioning.
Don't allow doubt to extinguish your hopes of home ownership by taking the next step. Contact a mortgage lender to go over these questions. Understanding your options will increase your opportunity of of home ownership. A reputable and experienced mortgage lender can help you zero in on the most important issues that you may need to address.
Kate Ford, a mortgage insider, assists home buyers at Discover The Magic of Buying A House Learn how to benefit from the new and improved FHA loan limits
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