Are You Ready for Home Ownership?

Owning your own home, is not only symbolic of the American Dream it is also the biggest investment that many of us will ever make.  It will be your single biggest asset when it comes to retirement so you want to make the best investment possible.  Buying a home is a process, not just from the legal and financial standpoints but mentally as well, you need to be ready for the kind of commitment that a home requires.  So before the house hunting starts let’s look at where you need to be before you call a realtor to help.

Mental Preparation

Are you really ready for home ownership?  It is a long-term commitment, both financially and otherwise.  As a tenant when something goes wrong you call your landlord to have it fixed, as a homeowner that responsibility falls squarely on your shoulders…along with the costs.  This is a big step so make sure that you are prepared for it.

Check Your Finances

Before you start searching for the latest listings you need to take a long look at your bank account.  There are three things that you need to look at.  First how much can you reasonably afford?  What kind of mortgage will you qualify for?  How much are you comfortable spending on a house?  You are going to need enough money for a down payment, the closing costs and some money set aside for contingencies.  Your new home is likely to need some work and you are going to want to have enough money set aside in the event of an emergency.

Check Your Credit Rating

Once per year you are entitled to request a copy of your credit report at no cost to you.  Your bank or credit card company may even be able to help you with this as well.  Check your report thoroughly and make sure there are no errors, if necessary pay down some debt to improve your score.  The better your score the better mortgage you will qualify for.

Get Pre-Approved

Before you start looking for a house first find out how much you qualify for.  Talk to a mortgage broker, they work with many different lenders so you can find not only the best rate but the best type of mortgage.  A broker can explain to you the difference between fixed and adjustable rates along with the terms of a mortgage.

Go Shopping

Now that you have all your ducks in a row it is time to start looking for the perfect house.