Buying a home will probably be the largest purchase you will make in your entire life. While home ownership is part of the American dream, it is a really big commitment and you need to be sure you have checked off all of the boxes to be sure you are ready.
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You have done your research
Before you start house hunting, you need to do the proper research so you are a well-informed buyer. Once you identify your target area, keep an eye on the market and find out what houses have closed for within the past year.
You also need to mentally prepare yourself and identify what you are looking for in a home. How many bedrooms and bathrooms do you need? Is a large kitchen or backyard a priority? What other features are you looking for? It is also important to gauge your interest (or patience) for a renovation and decide if you are looking for something move-in ready or a fixer-upper. Be realistic about your wants and needs. Remember, a pool is nice, but an extra bedroom to grow into might be more practical.
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You are in good financial standing
To buy a home, you need to be in good financial standing to secure a mortgage and be financially responsible. You should have saved money for a down payment and keep in mind that an ideal down payment is 20 percent of the asking price. Consider questions like: Do you stick to you budget? Are your finances organized? Do you have a reasonable amount of savings? Do you have good credit and limited debt?
You have accounted for the actual costs
Even if you can afford to buy the house, you need to consider other costs, such as insurance, property taxes and closing costs. Owning a home also brings added financial burdens, including increased gas, water and electric charges, repairs, and upkeep that renting doesn’t have.
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In order to buy a home, you need to be sure you can keep yourself afloat financially after your purchase. You need a steady job with a fixed income, and you can’t bank on a raise or promotion that isn’t guaranteed. You also need a large emergency fund to support yourself and your home in the event of a layoff or natural disaster. Also, take into account financial burdens on the horizon like sending kids to private school or college.
You are planning to stay put
Don’t expect to buy a house to flip it for an investment because the market is never guaranteed. Make sure you plan on living in the home at least three to five years and are familiar and comfortable with the area, schools, and proximity to work. Renting in the neighborhood is a good way to test the waters or talk to your neighbors about the pros and cons.
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