Buying a home

For some people, buying a home remains their American dream. They want the stability and comfort of a place they can call all their own. But, since the recession, the job market has remained a tough place and many consumers aren't as sure if it's the right time to make such an important financial decision. Many questions come up when home buying becomes an option: How much can I afford? Do I have enough saved for a down payment? What kind of mortgage should I get?

Before potential homeowners connect with a real estate agent and take the plunge into house hunting, they should first decide if they're ready for the real estate commitment. Here are numerous ways to know you're ready:

  • You plan to stay in your current area for at least five years.

  • You're happy with the community, and if you have children, schools in the area.

  • You have a steady source of income.

  • You know how to create and live within a budget.

  • You've researched the homes you can afford.

  • You've considered your must-have features as well as the factors you can be flexible on in a house.

  • You've discussed preapproval for a mortgage or become preapproved with a bank or credit union.

  • You've saved approximately 20 percent for a down payment in your price range.

  • You have savings in addition to your down payment funds.

  • You have researched and understand the costs of owning a home in addition to the mortgage payment such as home insurance, a home warranty, taxes, maintenance and repairs.

  • You're able to continue paying down any debt you have.

  • You know your credit score and have worked on improving it if necessary.

  • You're prepared for a long journey and don't expect house hunting to be easy.

    If you answered no to one of these questions, you should think carefully before shopping for a house. Some of these factors are less important than others and can be overcome, but to truly be in a good place to purchase a home, you should answer yes to all of the statements.

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