Tax breaks and having a tangible investment are only some of the incentives attributed to purchasing your own home. There are plenty of reasons to choose buying a new home over renting. After you’ve decided that buying a new home is the right plan for your life, here are some things to consider before launching this grand investment.
Whether or not you can afford a house is an important factor to consider. Several first time home buyers must take into account how much of a down payment can be made on the house as well as how much of a loan he or she can be approved for. This applies to you as well as it is an extremely common conundrum. Your investment in a home should never exceed 28% of your annual income, and this investment doesn’t just include the house itself. This also includes property taxes, insurance, mortgage payments, agency costs, etc. That being said, you should really evaluate your financial situation before signing any sort of contract when buying a new home.
Coinciding with an evaluation of your finances is an assessment of your overall debts before buying a new home. Eliminating credit card debt, paying off that new car, and sizing down your student loan will help when saving for your down payment. High interest debts can build a wall between you and your dream home, so knock it down while you still can. Investing in something substantial like a new home can hurt you financially if you have increasing debts behind you.