What Finances To Prepare When Buying A House
It’s 2021, another new year filled with goals, ambitions, and plans that you hope will pull through (we’re rooting for you!). Many of us have spent the last year at home more than ever before, and many have come to realize that we just don’t have enough space. Converting your home to also appeal to your office needs has mixed up a lot of what we once considered sacred.
So, maybe this year will be the one where you get out of that apartment or current home and into a new one. However, there are some things to look at first before making a move too soon. One of the best things to remember when purchasing a new home is to have patience. Rushing could cause problems down the road that you may not have realized before! So, let’s start from the beginning.
Are Your Finances Ready For A New Home?
Realizing you don’t have enough space, or maybe the area you’re in just isn’t working out for you, isn’t enough to get up and leave. Look at where you are when it comes to your finances. Consider some major aspects of your life first, such as:
- Have you adjusted your spending habits already?
- How do your credit cards and any other bills compare, such as a car or school loan?
- If you’re working from home, will you soon return to the office, or are you preparing to continue the work from home life?
- Do you have plans to start a family, or is there a little one on its way?
These questions can determine a lot about how prepared you are for a major home purchase or if you’re still in the planning phase. Going in without having your finances clear and ready can set you back when you need it the most. You want to also prepare for new household items that you may not have had before. Think of things such as a washer, dryer, maybe even a new fridge and tables for inside and outside. Don’t go rushing out and getting these expensive items right away, but keep them in mind as you do your financial planning.
The Credit Score
This ties into everything we covered above. Your credit score can help you get a better loan and even lower the interest rate of the loan. As you may know, your credit score gives lenders an idea of how risky it would be to lend money to you. If you keep proper track of your finances and the amount of money you owe, your chances of having a good credit score when you begin your house hunt should be simple. Also, if you do have low balances but still have only a decent credit score, look into what types of credit you have open. Only having a series of loans or credit cards may not take your score very far. However, having a mixed type of credit will give creditors a better idea, and it can change your score.
Finances 101: Save, Save, Save
Okay, so your finances are in order. You’re aware of your credit score and what you need to do to make it better or maintain it. Now, there are two things to start saving for once you do begin, your down payment and spare savings. In order for you to figure out how much money you need to save, start making home goals. Having a range can also keep you prepared for what’s available on the market when you’re ready to make a move. Keep an open mind when looking for home possibilities. When you’re looking to buy a home, there’s much more to think about than just the present.
Your down payment amount is encouraged to be around twenty percent of the overall cost. Although, we know how difficult it can be to save that amount. So, try getting as close as possible to that amount can save you on loans.
When it comes to spare savings, then save for a minimum of six months worth of living. This will help you get through any hardships if there are any sudden life-changing events.
A Future Home With Zia Homes Is Waiting For You
We have a simple breakdown of the buying experience to make it even easier for you!
When you’re ready to begin this new journey, give us a call. We have homes all across El Paso, Texas, and the surrounding areas. We’ll help you find a home that matches your needs to create a better future. You can visit our website to see our floor plans and where we have housing across the city. Give us a call today to start your new journey!