First Home Purchase – To Buy or Not to Buy a Home

We have all said at some point when we look around at our apartments “I wish I had a house”. In reality besides cost; your first home purchase can be a nerve wrecking prospect.
Owning a home is not a realistic prospect for everyone. Besides cost there is responsibilities with owning a home. It is always better to sit down and take a serious evaluation of your situation before signing a contract on a home you may not be able to handle in the long run.
Unless you are rolling in cash, you will have to get a loan from some kind of lender to get a mortgage. Whether you qualify for a loan or not is based on several factors and your credit is a big one.
So, the first assessment for you to decide if you can take on the responsibility of a first home purchase is that you have to see if you are credit worthy to own a home. If your credit rating is 620 or less rest assured that your interest rates on a home will not be good.
They will run extremely high. In a case like this it is better to fix your credit first before even considering a house.
If you decide you want a home anyway with bad credit then you have to be careful. The lending predators will come out of the wood work to prey on you because of your situation.
Your job situation is another factor in deciding whether to rent or pursue your first home purchase. If you do not have a secure job that will make a problem when it comes for you to make your mortgage payments.
Beside mortgage payments there is upkeep and maintenance issues you face to maintain a house and all those things cost money too.
What you have to do if you are thinking about buying a home is to sit down with a paper and pencil and seriously analyze your finances. You have to make sure that you can afford a home on your budget.
For example if you are renting a dwelling for $2,000 dollars why would you decide to buy the same dwelling for $6,000 dollars a month. If you do the math to own the same home you would be renting would end up costing you $48,000 dollars more a year. Think of your first home purchase as a business decision.
To top that off if you are in a 30% tax bracket you will never recoup what you are putting out. Just food for thought.
In addition to the mortgage there is other costs that have to be met when you become a home owner. These costs include utilities, heat, property taxes, repairs, insurance, service costs for things like trash or snow removal, landscaping and assessments and replacement for appliances when needed.
This does not include your food, clothing and other things you need to survive with. All these things have to be looked at closely to see if you really want to take the plunge from renting to buying a home.
Most importantly (and I say this time and time again), your first home purpose has to be made upon good, sound, logical reasoning. Emotion has no place in the decision making process. If you are “desperate” to get into a home, fall in love with a house or feel you need to purchase a home because “everyone else is”, then you are not in the right mindset.
Buying a house should be like a business decision, do your sums, work out your needs then find a home that ticks all the right boxes.

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