Financial

How to Prepare for Home Ownership

Purchasing a house is the single biggest investment in the lives of most people. It is not a decision to be made quickly or with minimal information. Conduct some research, get finances in order, and begin to save for a down payment.

It is also beneficial to begin thinking about what is needed in a house, what is desired, and what compromises can be made. The number of bedrooms needed, for example, should include the number required now, as well as bedrooms needed in the future. A young couple may want to look at two and three bedroom homes, for example, if they are planning a family.

Review a Current Credit Report

Obtain a report and go over it to see if there are any inaccuracies, any outstanding debts, and any issues that need to be addressed. That report will play a major part in getting approval for a mortgage. Review it with a banker or mortgage broker who can explain what each entry means. There is more help here regarding how credit effects a mortgage.

Save Money

Open a separate bank account for the purpose of saving for a down payment. The amount of money available at the time of purchase can have an effect on the interest rate of the mortgage. Saving money now will save homeowners money for the length of the mortgage. The principle is lower, the interest rates are lower, and payment will be lower for the next twenty to thirty years.

Be Realistic Regarding Household Expenses

It will be well worth the time to speak to family and friends who already own a home to discover actual costs of being a homeowner. There are a plethora of new costs that renters never have to consider. Homeowners insurance, taxes, protection plans for appliances, repairs and maintenance, and some utility bills are expenses that will add up fast. A water bill, trash collection, buying a lawn mower, and snow removal are a few examples of smaller expenses that renters rarely have to pay.

Before purchasing a home, ask how much it cost to heat the house last winter. Find out how old the roof is and the condition of the furnace. Questions regarding any basement leaking, the age of the windows, and how quiet the neighborhood is at night are smart ones to ask while walking through a potential home.

Leave a Comment