Are you tired of paying someone else mortgage? I you're ready to graduate from renting, here are few things you need to consider:
Yes, money. You can't buy a home off of goodwill. Money relates to:
- Your career. When you get prequalified by a mortgage lender, you'll have to submit pay stubs and income statements. The lender wants to make sure you have a stable job and that you earn enough money to make the monthly mortgage payments.
- Down payment. Ideally, most mortgage lenders would recommend to put down 20% of the purchase price. If you don't have 20%, that's okay. Some lenders will let you put down 5% and you will still qualify for a conventional mortgage. However, anything less than 20% will usually result in mortgage insurance. Mortgage insurance is a small added cost to your monthly mortgage payment.
Buying a home is large commitment. If you're looking to "plant roots" in a community, purchasing your first home might be the best option for you. However, if you're the type of person that likes move to different places, maybe buying isn't the right thing to do.
If you decide to buy, it's important to know where you want to live. There's nothing worse than buying a home you don't really like. One strategy is to rent in an area that you want to live in. If things go well, you can look into buying.