First Time Home Buyers – Test Drive before you buy!
Homebuyers, especially first time buyers across the country are bombarded with opinions of friends and family, local and network news, and blogging is preaching the virtues and dangers of buying a home in the current housing market.
But if you are a first time home buyer, how do you know if owning a home is a good decision for you?
How know if you can control the commitment and responsibility that comes with the assumption of ownership?
Why not try out first before you buy your home?
OK, you can not choose a house to move in a few weeks and see how it fits, but what I can do is try to change the style Life owning your first home will bring.
In the housing boom for the last time buyers too long enclosing the same importance to the purchase of a house as they were picking up the National Enquirer at the supermarket check-out. "It was more an impulse buy that the decision should be carefully considered have been.
Regardless of how an industry "professionals" may try to sugar coat it, owning your first home will cost more than the rent every month and you may not make adjustments to their lifestyle and finances accordingly. This may mean the elimination of daily pilgrimage Starbucks or skipping one night per week, the city, but only you can determine if these sacrifices will be worth all the benefits of property from rental offers.
If owning your first home is important in a four-step process to help you decide if this is the right decision for you.
1. Select payment TARGET – Forget selling prices, neighborhoods, bedrooms and bathrooms and focus on the monthly payment you feel comfortable paying every month.
But we must be realistic. If your dream house has four bedrooms, a modern kitchen and a playground for children and dogs, will not pay equivalent to the rent you pay now for this two-bedroom apartment.
It is authorized to stretch a little because you start your search for accommodation is very likely will be visiting homes in the range "instead of a single price. A general rule of thumb is to try to maintain payment of no more destination 33% of your gross monthly income.
His monthly "nut" your commitment is real and that payment must be in their comfort zone or you will end up being poor "House" does not enjoy all homeowners may be beneficial.
2. Add additional cost of ownership – The additional cost of homeownership is the things they have learned to trust their own payment, which is now their responsibility, such as maintenance routine, improved stainless steel appliances, new paint and floor coverings.
I recommend at least $ 400 – $ 500 extra. Property housing does not cost much every month, in general, but there are times where it is and must prove to himself that he can handle unexpected expenses.
If you chose a goal of $ 1,300 pay per month, the additional cost of ownership leads to total $ 1,700 – $ 1,800.
3. Subtract this amount for rent. If your current rent is $ 1,000, you must be prepared to commit a month $ 700 – $ 800 for the costs of homeownership.
If you are living with Mom and Dad to save money for a down payment that is even more important because housing costs ranging from zero to $ 1700 will create a shock their finances and mental well-being and the lender will ask how they will cope.
4. Bank of difference - Take one additional $ 700-800 per month and put on your savings. What are the lifestyle changes you need to do to achieve your goal? Nobody can really answer that question as you.
It takes discipline, but the fact of the liability of owning your first home.
This is not a plan of one or two months. Test the reader as long as you need, but I recommend at least 4-6 months.
Three very good things come from "driving" style life of property.
1) You have a better idea of what owning a home really costs
2) Your lender knows that you have demonstrated your ability to register you will feel better about your loan approval.
3) Have more money at the bank, that this economy is a good thing.
You may find that you are not yet ready to make lifestyle adjustments that homeownership brings. Better to find during the test run "To know that once you have moved in.
Owning a house you can not not have a return policy, this is called foreclosure and the cost to you far outweighs the extra effort in advance.
About the Author
Greg Cook is a mortgage professional with 30 years experience helping first time homebuyers achieve their dream of homeownership. His street level view of today’s real estate market won’t be found in national or local media outlets.
Visit Greg’s blog
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