Homeownership is the American dream in its purest form.
Unfortunately, owning a home is also extremely costly. The average home in the United States is worth $276,717, according to Zillow. The local average, depending on where you live, can easily exceed that by hundreds of thousands of dollars.
When it comes to buying a home, keep the following in mind:
Purchase only what you can afford:
Housing costs should not exceed 30% of your monthly salary, according to a conventional rule of thumb. Unfortunately, lenders frequently accept borrowers for much more.
No one, not even a lender, knows your financial circumstances as well as you do. Make sure your home's monthly payment fits comfortably into your budget. Remember that your monthly costs include more than simply your principal and interest.
You must also include in home insurance and taxes, which are sometimes more costly than individuals believe.
Put money aside for a down payment:
To buy a home with most types of financing, you'll need a down payment. A standard mortgage requires a 20% down payment, but an FHA loan only only 3.5 percent. You don't need 20% down, but if you put down less than that, you'll have to pay PMI.
In addition to the down payment, there will be other upfront charges. Closing charges, a house inspection, and moving costs are among them.
Maintain an emergency fund at home:
Home maintenance is costly, and experts recommend setting aside around 1% of your home's value each year for maintenance and repairs. Keep a separate emergency fund for your home in addition to your personal emergency fund so you can easily afford any unforeseen repairs.
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