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Your Financial Checklist for Home Ownership

Embarking on your journey to homeownership? That's exciting news! As you're likely aware, this step involves a significant financial commitment. To help you navigate this process, we've prepared a financial checklist that covers key points you need to consider. Let's dive in!

Savings for Down Payment

The first item on your financial checklist should be savings for a down payment. While the exact amount can vary, typically you'll need anywhere from 3-20% of the home's price. Start saving early and consider opening a dedicated savings account to keep track of your progress.

Check Your Credit

Your credit score plays a significant role in the home buying process. It influences whether you're approved for a mortgage and impacts the interest rate you're offered. Regularly check your credit report for any errors and work on improving your score by making timely payments and reducing debt.

Get Pre-Approved

Getting pre-approved for a mortgage is a smart move. It gives you an idea of how much you can borrow, which can guide your house hunting. To get pre-approved, you'll need to provide your lender with information about your income, assets, debts, and credit history.

Budget for Additional Costs

Buying a home involves more than just the purchase price. Don't forget to budget for:

  • Closing Costs: These include fees related to the home purchase, such as the appraisal fee, home inspection fee, and origination fee, and usually range from 2-5% of the loan amount.

  • Moving Expenses: The cost of hiring movers or renting a moving truck, plus any necessary packing supplies.

  • Home Maintenance and Repairs: Once you're a homeowner, you'll be responsible for maintaining your property. A common rule of thumb is to budget 1% of the purchase price per year for ongoing maintenance.

  • Property Taxes and Insurance: Don't forget ongoing costs like property taxes, homeowner's insurance, and if applicable, homeowner association fees.

Steady Income

Lenders will want to see that you have a stable income to cover your mortgage payments. If you're considering changing jobs, it might be best to wait until after you've secured your mortgage.

Homeownership is a thrilling journey, and while it involves a substantial financial commitment, it doesn't have to be daunting. By following this financial checklist, you can prepare yourself for the road ahead and move confidently towards your goal of owning a home. In our upcoming posts, we'll delve deeper into the intricacies of mortgages, finding a real estate agent, and more. Stay tuned, and let's make your homeownership dreams come true!

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