HOMEOWNERSHIP

 December 1, 2021

 

 

For most, homeownership is one of the most common goal and financial topic. After all, owning your own home sounds fun right?  

 

Unfortunately, a home is also incredibly expensive. According to Zillow, the average home in the United States is valued at about $276,717 USD and depending on where you live, the local average can easily exceed by hundreds of thousands of dollars. Which is understandable if you enjoy having the finest that life has to offer.  

 

Here are a few tips to consider when buying your home. 

 

1. Only buy what you can afford.  

STAY WITHIN YOUR BUDGET! A general rule to keep you financially safe is that your housing costs shouldn’t exceed about 30% of your monthly income. Unfortunately, lenders often approve borrowers for far more than that, but remember that no one knows your financial situation like you do; not even a lender. So be sure that your monthly payment for your home fits comfortably within your budget.  

 

 

2. Save for a Down-payment.  

 

For most loan type, you must have a down payment to buy a home. Down payments typically range from 3.5% for an FHA loan to 20% for a conventional mortgage. You don’t necessarily need 20% but you’ll have to pay PMI if you put down a smaller payment.  

 

There will also be other upfront costs in addition to the Down-payment. These include closing costs, a home inspection, and moving costs.  

 

3. Maintain a home emergency fund.  

 

As we know, owning and maintaining a home is expensive and experts generally recommend saving about 1% of your home’s value each year for maintenance and repairs. In addition to your personal emergency fund, it’s best to keep a separate emergency fund just for your home so you can easily afford any unexpected repairs.  

 

Written by:  Xoa Grant