Money Mondays

5 tips before purchasing a home

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I know you may not want to hear this, but I have to say it. If you can afford to purchase a home....do it!

This is truly a buyer's market. Homeowners and banks are practically giving homes away. The market is down, economy is bad and companies are cutting.

You may ask so why should I buy a home during this economic turmoil? Simple, ownership. Owning a home gives you the freedom to build wealth. I'm not saying to go out and spend all your savings today. I am going to list 5 pertinent things to consider before pursuing your goal.

1. Check your credit score. Credit range from 300-850. A good score is 750+. I suggest for you to log on to truecredit. This will allow you to see your entire credit history and scores. The most important aspect of this site is that it lists ALL 3 bureaus: Transunion, Equifax and Experian. Remember, what is on one may not be on the other. You have to inquire to correct all three. The better the score the lower the interest rate.
2. Review your down payment. A great down payment is 10-20% of the purchase price of the house. Try to shoot for 20% to avoid the PMI. What is PMI? It is private mortgage insurance. It protects the lender not you in case of a loss of the property.
3. Don't spend more than you can handle. Consider your home expense ratio, which shouldn't be more than 28% of your monthly gross income. This includes mortgage, taxes and insurance. Don't forget daily living expenses which can fluctuate.
4. Location!Location!Location! Where are you consider purchasing a home? Although the home listed in the buyer's guide is in your price range you may want to take a look at the neighborhood. While searching for a home consider an area that has potential for growth. You don't want to invest in a deteriorating area that is desolate and unmarketable.
5. Research a broker. There are many to choose from as we all know. It's fine to "interview" each broker to make sure he/she has your best interest at heart. At times it's difficult to find someone who doesn't only look at dollar signs.

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There are many steps to consider when purchasing a house. It's important to make sure you have a financial plan to enjoy your dream home. Research and go forward.

Be inspired,
Bahiyah Shabazz