You are welcome to another episode of our real estate tour on your favorite real estate platform LASGIDI REAL-TOUR. Today, we will be looking at HOW TO GET YOUR FINANCES READY FOR BUYING YOUR FIRST HOME.
Buying your first home is one of the most exciting milestones in your life. You get to own something tangible and are no longer indebted to landlords. But getting financially ready for this big step can be financially stressful. Follow the guide below on how to get your finances ready for buying your first home.
- GET A STEADY SOURCE OF INCOME
One of the first steps towards buying your first home should be establishing a source of income you can rely on each month. You can’t really buy a house without money! Knowing exactly how much you make from every paycheck can help you make a solid financial plan for your house.
If you currently run your own business or work for someone that doesn’t mean you will never own property. But having the same level of income coming into your bank account each month sure makes it easier to plan your finances. When you have varying sizes of paychecks, you might not be able to make your mortgage payments or save up for your down payment as quickly as you thought.
2. CONSIDER WHAT YOU CAN AFFORD
Once you have a steady stream of income, adjust your budget with buying a new home in mind. At first, figure out how much you can put towards your down payment and how long it will take to save that. You should also calculate to see if you’ll be able to afford your mortgage without having to survive on ramen for the next decade.
When buying your first home, you also need to consider where you want to live. This can really affect your financial plan! You’ll be putting a lot of money (and probably years of your life) into this house, so you want to make sure it’s both a good fit for you.
You should also think about how much house you really want and need. Perhaps you’re planning to start a family so you need multiple bedrooms. Or you want a big yard for your dogs to play in. Make a list of “want” and “need” features for your first house, then start shopping.
If just fulfilling all of your “needs” is out of your price range, it’s time to consider a different neighborhood. Figure out which is more important to you, location or extra features of the house, and use that information as your guide as you house hunt.
3. START SAVING!
Now that you’ve decided on the type of house you want to buy, it’s time to start saving for that down payment. It’s easy to feel impatient at this point in the home-buying process, but chill out. Even if you make good money, saving up that much can take a few years. To make it go faster, try budgeting out things you don’t really need like that daily Starbucks or expensive vacation.
n addition to the down payment, it’s also a good idea to start an emergency fund. This should include enough money for living expenses for a few months. When you’re paying a mortgage, money can be tight, so having a little extra in case you can’t work for some reason will make you feel much more at ease. This is especially smart to have if you plan on buying your first home in a new city where you don’t yet have a job.
4. IMPROVE YOUR CREDIT RATING
Having a good credit score is important for a lot of reasons, but buying a home is one of the biggest. Having good credit tells mortgage lenders that you aren’t a risky client and that you will make your payments on time. If you have a bad credit though, you’re less likely to get approved for the loan. And unless you can pay for your house in cash, that’s a big problem!
One way to boost your credit is to fix any bad habits you currently have. If you are the type of person who is always a few days late with loan payments or always goes over your credit card limit, you have to stop if you are serious about buying a home.
Buying your first home is a major milestone! That’s why it’s not to be taken lightly. It might seem like an overwhelming process, but never fear! With the few simple steps, I’ve outlined above, finding your dream house won’t make you want to tear your hair out.
Do you need help getting started with buying your first home, you can reach out to us, We also help you with getting mortgage and we have properties with flexible payment plan as well as a property you can move into and balance the payment over 7-8 years.
Contact us for more details.