Where To Begin
Checking Credit
Research Before Choosing A Neighborhood
Check the Zoning
New Home Or Resale?
Think You Don't Need Flood Insurance?
Used Homes
Do I Need Title Insurance?
Be Alert For Sellers’ Tricks
Recruiting The Experts
Choosing A Real Estate Agent
The Foreclosure Market
Buying? Think Selling!
ALWAYS—ALWAYS Hire a Home Inspector
Be Your Own Inspector
Partnership Purchases
Financing Tips
Can't Afford A Down Payment?
Negotiating Tips
10 Tips For Winning A Bidding War
Homebuying Checklist
Home Warranty Tips
Can You Afford the Home You Want?
Green Building Tips


Where To Begin

While the American Dream is one of home ownership, there may be times when owning a home makes neither practical nor economic sense, and for a few, a home should never be the ultimate dream. For the majority of us though, home ownership provides both financial and emotional advantages, and for most people, the purchase of a home is the largest and most profitable investment they'll ever make. If you think you're ready, consider the following:

Is your job stable? With mergers, overhead reductions, downsizing, and re-structuring, hardly anyone's is. If you lose your job, can you easily replace it without leaving the area? Relocating can cost thousands in commissions and other expenses associated with the forced sale of a home. While I'm not advocating paranoia about losing your job, I do want you to know the importance of employment stability, a key factor in making a wise home buying decision. If you're married or have a significant other whose salary will be needed to help make the mortgage payment, then the security of that person's job must be considered, too.

Furthermore, if you plan to purchase a home within the next twelve months, it's not time to change jobs. Lenders have reservations about granting mortgages to those whose employment seems tenuous, and if you think you may have other reasons to cause lender reluctance, such as less than perfect credit, it's especially important to demonstrate a stable work record. Save the job hunting until after closing.

Financial Status

Do you have a pattern of regular savings? Is your credit in good shape? (Don't know? Click on, Checking Credit, for an answer.) Are you stretched to make the payments on that jazzy new convertible, the sleek personal watercraft you looked so good on last summer, or the ten-thousand watt mega-blaster stereo that rattles windows three blocks away?

In order to qualify for a mortgage, you'll need to demonstrate a good record of making payments on credit cards and consumer loans. And if you are planning to purchase a home within the next year, you need to cut back on your credit purchases now. Adding to your debt will limit your borrowing power and create a strain on your budget once you do have a mortgage. However, even if you are struggling to make your monthly payments and have sustained a few blemishes to your credit rating, there are ways to reduce debt, get back on track, and begin planning for the purchase of a home.

A factor that may not impress your friends but always brings joy to mortgage lenders is an applicant who can demonstrate a program of regular savings. If you have good savings habits, lenders know you are an above average credit risk. And, of course, if you plan to buy a home, you'll need some of those savings for the down-payment and closing costs. Later, you'll need the discipline that a savings program develops in order to keep your mortgage payments up to date. If you haven't been saving, start today! Any program is better than none.

Then, after a few years in your new home, you will benefit from the increased appreciation, adding to your savings. With a national savings rate below 5%, many Americans find home ownership the easiest way to accumulate wealth.


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