How to Prepare for Homeownership
Hurst Lending and our AgsReward division are very involved with the Texas A&M community. As such we hear from a lot of recent graduates who have questions about when and how they should prepare to buy a house. Generally speaking, as people get older, we tend to look to home ownership as a means to a space to call our own, provide stability for our children, and to build up wealth. However, for a whole host of reasons, it is not always feasible to own. Obviously, bad credit alone can have a big effect on one’s ability to get approved for a mortgage (although there are some options, such as FHA loans, that can help). Additionally, if you’re having trouble saving up for a down payment, or are currently working on paying off other debt, the most responsible thing to do may be to keep renting. So then the question becomes, “What can I do in the meantime?” Well, the good news is that there is a lot you can do – in addition to saving for a down payment – to prepare for you for buying a home. Keep reading for some tips that you can start implementing today!
1. Start researching: The first step to preparing for home ownership is to get a gauge of what the housing market looks like in your desired area. A number of things can affect this, from the quality of the schools, to plans for development and expansion. Determine what is important to you in terms of square footage, number of bedrooms, and so on, while keeping in mind the average cost of a home in your desired area. Do you have, or are you planning on having kids? How is the neighborhood for children? These are all things to keep in mind as you begin to think about home ownership.
2. Make a budget: After doing a fair amount of preliminary research, start trying to formulate a budget that will reflect how you’ll be living when you do own your home. By taking into account what you learned about the market, you can simulate what your financial constraints will be when you are a proud homeowner. In addition to house payments, take into the often forgot about costs like Private Mortgage Insurance