Home Purchase: Can Your Finances Handle It?

A couple discuss with the purchase of their new house

A couple discuss with the purchase of their new houseIf you’ve been renting a place for quite some time now, you may be considering buying your own home. Making the final decision, of course, is hard since you need to think whether or not your current finances or income can take on a mortgage payment. It is most confusing, especially if you’re used to paying a fixed amount for your rent every month.

Buying is definitely more expensive than renting, as you move on towards owning a home. You also need to get qualified for a mortgage to finance the property. There are, however, many benefits to this like building equity, tax deductions, and creative control over the house. These are something you can’t do with a rental, as you don’t own the home.

Additional Monthly Payments

If you’re thinking of buying, the monthly payment is probably one of your biggest concerns. The payment will include not just the principal, but also the interest, taxes, and insurance. This may cause your monthly loan payment to change from year to year. Mortgage companies in Tempe note that this will also depend on the type of loan you choose.

Putting Money Down

Down payment is probably the biggest hurdle. The good news is there are some loan programs that will allow you to get a loan even with little money down. If you have been saving for a home for some years now, it is even better. You can also get help from family members, as some mortgage programs allow gift funds to cover down payments.

Utilities and Maintenance

Paying for utilities is a part of renting and owning. If you want to get a property that is bigger than the place you’re renting, you may need to pay more utilities, especially for cooling or heating a larger house. There is also the maintenance, as every home will need some sort of routine care. You will need to cut grass or even a hire a contractor if something breaks.

A home purchase is mostly a financial endeavor. Be sure to assess your financial readiness and check your credit score. Your payment history and debts are important for all lenders. You can also get pre-qualified first to know the amount you can qualify for and learn more about different loan options.