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3 Tips to Help You Make Your Home Purchase DecisionThe decision to make a home purchase is one of the most important decisions you'll make during your lifetime. Few other life events carry as much financial and emotional weight as home ownership, and if you're considering taking the plunge and buying a home for yourself or your family, you need to do so with care. Owning a home can open the door to many opportunities for financial advancement and can greatly improve your standard of living and provide a stable, secure home environment for your family. But you will only reap these benefits if you make your initial purchase wisely and continue to manage your money and your property well during your time as an owner. You are taking on a great deal of responsibility. Consider each of the following factors before you decide whether now is the right time for you to own a home. Is your income secure? There are two ways to purchase a home. You can pay for it all at once, with cash you have in your bank account, or you can borrow money and pay for the home over time. The vast majority of first time home buyers choose the latter option, often opting for a 30 year fixed rate mortgage if such a loan is available. When you're taking out a mortgage, you're borrowing against the home itself, which means your continued ownership of the property is entirely dependent on your ability to continue making payments each month. If your future income is uncertain, don't take on a mortgage. You're setting yourself up for financial failure. But if your job is steady and secure or you have adequate money in the bank, a home can be a very wise investment. Do you know where you want or need to live? One of the most unique and significant characteristics of real estate is that it is place oriented. In other words, if you purchase a home in Atlanta, you can't easily transfer your ownership and equity to a different home in Dallas. Owning a home ties you to a specific geographic area. Geographic area differ dramatically. Population, infrastructure, proximity to jobs and amenities, and other factors all change depending on where you decide to live. Even different neighborhoods in the same city often allow for radically different lifestyles and come with different advantages and disadvantages. If you don't know what type of physical location or environment your current lifestyle and future goals require, you may not be ready to buy a home. But if you know where you want to be and you have a rough outline of the near future mapped out for yourself and your family, you're ready. Are you financially prepared? Financial preparation is arguably more important than any of the other items on this list. If you don't have the money to buy a product, you can't buy it. In the case of a home, you'll likely be taking out a mortgage, and if this is true, you need a solid credit score. It may seem as though you've heard this a hundred times. Homeownership comes down to your credit score first and foremost. If your credit is poor, you won't be able to get the home you need. This is the plain and simple truth. Take the time to build your credit score before you decide to buy. You'll save yourself tens of thousands of dollars during your time as a homeowner if you can get into a good mortgage. Do yourself a favor and start off on the right foot. |
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