Buying a home is the largest purchase most people will ever make. Homeownership has great benefits. Homeownership also comes with certain responsibilities.
Are you ready for homeownership? Look at your current situation and determine if:
you fully understand your current situation, it's important to look at
the pros and cons of homeownership to make the best decision for you
and your family.
Benefits of Home Ownership
Homeownership has many advantages - both financial and personal. But buying a home is an important decision. Look at the benefits and the differences between homeownership and renting to better understand if owning a home is right for you.
What are the benefits of homeownership?
Homeownership is not right for everyone. It may not be the right time in your life or you may not like the commitment associated with owning a home. Here are some differences between renting and homeownership:
How Much Can You Afford?
To get a quick idea of what you can afford to spend, multiply your annual gross income (before taxes) by 2.5. For example, if your annual household income is $50,000, you might be able to qualify for a $125,000 home. This is just a rough estimate - the actual number will vary based on factors such as your debt and credit history.
Mortgage lenders typically use the housing expense and debt-to-income ratios to more accurately determine how much you can afford to spend on your mortgage.
A mortgage lender or consumer credit counselor can help you better understand these guidelines. Before you talk to a financial professional, you can organize your financial picture by creating a budget. Don't forget that you also have to save for the down payment, closing costs, inspections costs, moving, and other related expenses.
What Are the Risks?
|Check For Properly Working Appliances/Fixtures:|
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|Ensure House Is Well-Built & Systems Are In Working Condition:|
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Myths About Homeownership
Lenders evaluate mortgage applications a lot differently today than they did even 10 years ago. And even more has changed in the last 20 years. What used to close the door to homeownership may not be a factor today.
Here are some common homeownership myths:
Myth: You need great credit to become a homeowner.
Myth: You need to put 20% down to buy a home.
Myth: Lenders share your personal financial information with other companies.
Myth: If you're late on your monthly mortgage payments, you'll lose your house.
Myth: You can't get a mortgage if you've changed jobs several times in the last few years.