Are You Ready to Buy A Home?

Congrats! You have made the decision to buy a home.

Know Your Income/Expenses

First determine how much income you have coming in, and your monthly expenses. Know this first.  Document where you currently are and where your major expenses are. Understand depending on your financial situation, it may take 6-24 months before you are ready to purchase your home.

Next, self access, where you can decrease your expenses?What can you live without? Save where you can. If need be cut some expenses so you can get closer to your savings goal.

If possible, also think about increasing your income. There is no one right way to do this, there are countless ways to increase your income. If you are serious about learning about personal finances, take time educate yourself where you want to be at the end of the month/ year.

For decreasing your expenses, you can audit your spending with an app such as Mint. I have used it in the past. You can link it to your accounts, and it will create pie charts on your current monthly spending.

This app is great since you can see where you can cut your expenses! If you are totally unsure of how much you spend- review daily/weekly/monthly and see where it is best fit to cut your expenses.

Know Your Down Payment

You can purchase a home for less than 20% down! Start researching other programs besides conventional such as FHA. Your savings goal will be based on how much money you need for a down payment. Do you plan on going with 20% conventional or a low money down product such as FHA 3.5%? If you don’t decide to put 20% down, you will be paying PMI (Private Mortgage Insurance) for the life of the loan.

Action Steps

1. Access your current income (do you need to create more? )

2. Decrease mindless spending (lower expenses)

3. Know your loan. Conventional, FHA etc.
   
   

Keep in mind: You can make daily changes that will become habits. It will not happen overnight. Your consistent habits over time will create a positive change in your finances.

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