Date Posted: 2012-07-19 02:58:25
Site Posted: Myproperty.ph
The biggest mistake anyone can make when buying a house is overestimating their financial ability to purchase and keep paying for one. More often than not, these are the homeowners who find themselves knee-deep in mortgage trouble down the road.
You need more than just the desire to become a homeowner; you need to be financially fit, too. If you can answer a resonating “yes” to these money-related questions, then you might as well start hunting for houses for sale now.
Are you good with budgeting?
Being a homeowner is not just a right; it does come with a lot of monetary responsibilities. You have to be smart when it comes with spending, and this kind of training is not something you learn overnight. If you’ve been living within a budget for some time now, you know how much money is coming into your home, where it’s going and how much you usually have left. With this knowledge, you’ll be able to tell how much you can afford to spend on monthly mortgage payments, home insurance, property taxes, as well as your other regular expenses like food and utilities.
Do you have a stable, well-paying job?
House payments don’t stop with the purchase; you still have a lot of monthly expenses that you need to take care of, which means that you should have a steady job that pays well. Have a look at what your expenses are like now; if you’re living from paycheck to paycheck or your job is not in a very stable industry, you might want to think twice about buying a house right now. Sure you can make payments for the first six months with what you’re making now, but how about five or ten years down the road?
Are you handling your debts well?
Everyone has debts; what separates the ones who can buy a house from everyone else is their ability to stay on top of their debt. Before you can make an offer on a house for sale, you have to have a mortgage pre-approval, and you can’t get a pre-approval if the lender sees that you have trouble making your debt payments. Before you approach a lender for a pre-approval, it’s a good idea to bring your debt down substantially and to put off large purchases and taking out new loans for now.
Have you been putting away money in an emergency fund?
Unexpected events like illnesses or natural disasters can put a huge dent in your income, so it would help if you have an emergency fund that won’t drain your salary as it comes in. This will assure you that even if you’re going through a financial bump in the road, you won’t miss any mortgage payments.
Your dream home can easily become a nightmare if you end up in debt because you didn’t think things through before making your purchase. Make sure that you’ve looked at your present finances and drawn out your future spending before finalizing your decision.
Jillian Cariola, Writer
(cover image by Val Lawless)
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