Before you jump into home ownership, it's wise to take a moment to think seriously about your current financial situation and how buying a house will affect that. Ask yourself the following questions:
Is my income stable and do I have a monthly budget? Do I have disposable income each month, or am I living from paycheck to paycheck?
What's my current rental payment and what can I reasonably afford for a monthly mortgage payment?
How much will property taxes and property insurance or condo dues cost?
Am I currently able to save and/or contribute to a 401(k) or other retirement savings plan? Would I be comfortable diverting part or all of those scheduled savings into a mortgage payment for the next few years?
What's my current tax bracket and will I be able to use the write-offs for interest and property tax payments? What will my new housing payment look like after figuring in the tax benefits?
Will I have cash reserves left after closing in case the property needs repairs? Will I have money left to buy furniture and move?
Is my employment situation stable? If I were to lose my job, do I have a safe fallback plan? Do I have the support of your parents or other family members in case of a cash crunch? Do I have untapped credit available on credit cards?
I would love to set up a consultation to discuss your budget and credit report, even if you're not ready to buy yet.
