So you want to buy a home? Cool! This home you purchase will be the nicest, bestest home you can afford, right? But wait! What can you afford? What type of home is in your budget? How long do you want to be in this home? Where will this home be located? When will you purchase your home?
You may not know the answer to all these questions right now, and that's fine. Here is a small list of things you should know before you jump into the home-buying process.
Know your home budget. There's nothing worse than getting all excited about a house and making a purchase only to find out that the home you bought is beyond your net or actual - not your gross - income. You will either have to get supplemental income or lose your house. Need help with budgeting? Check here and download the budget sheet.
Know what you can afford. Your budget details the money you have coming in versus the money going out. Maybe you don’t have money saved up. You may want to rethink the time frame for your purchase. You want to have at least 3-6 months of expenses saved. That’s not including what you will need for your down payment unless you are considering down-payment assistance programs.
Next, you will want to distinguish between the home you want versus what you need. Yes, the glitz and glamour are good but do you need it? A hot tub would be splendid but is it a necessity? Listing what is needed and starting there grants a precise picture for you to hold next to your budget and what you can afford. You can still add needs to your list if you honor what you can afford.
How long do you want to occupy this home? Is this a home you want to be in for a year, five years, or life? Sometimes your temporary home can have a lot of wiggle room based on your needs and wants because it is not a home you want to be in forever. You may utilize this home as a starter or a possible rental and want to get your feet wet. Either way, you have to know the purpose of this home and how long you intend to nest in it.
Location is key. Do you want to live near your child's school, close to work, shopping, etc.? If you can find all three desires, that is great. Just know this only sometimes happens. Take the time to peruse the areas near your top priorities and go from there.
When will you make your purchase? Active listings available in your preferred area may be few. Having your financial situation in order is monumental when the time comes to make that purchase.
Taking these steps is intricate in the home-buying process. Locate where you are on the list to identify if you are ready to purchase your home. If you notice that you aren't, don't be discouraged. Prioritize what is needed and how long it will take you. In the end, you will have learned much about your family dynamic and what it takes to sustain this lifestyle.