Even if you think that homeownership is out of your reach that’s not always true. You can do anything you set your mind to, even own a home with bad credit or no credit. Before you even start making comparisons in the cities and of the homes where you might want to live, it is first important to make sure that you have a few things squared away when it comes to owning your own home.
Homes cost money and homeownership can be pricey. Here are a few things to keep in mind when you start considering buying your first home.
Straighten Out Your Credit Situation
The first step in anyone’s ability to own their own home is dealing with any credit issues they may have. Someone with good credit will easily be able to get a loan to own a home, but someone with poor or no credit will come up against some difficulty. In fact, if you talk to anyone that has tried to buy their own house with no credit you’ll find out that have bad credit may be better for you.
If you have no credit it’s time to start building some, even if that simply means getting a couple credit cards that you only use once or twice a month. If you have bad credit it’s time to check your credit report and start getting those delinquencies paid off, and then get yourself a credit card or a small loan to help build your credit back up some.
Save Up Your Down Payment
Just like with buying a vehicle, you need to have a down payment. While there usually is no specific set percentage you should put down, the more you put down the less your mortgage will be, and this will also possibly lower the amount you have to pay on it on a monthly basis. Five percent is usually the smallest amount a realtor will let you go with.
You should, if you want to get the best deal, have 20 percent of the cost of your home to put as your down payment. You could do more, if you have the money, but saving up 20 percent could be a bit of a feat depending on how much the home you’re looking at is and how much your normal household income is.
Make Sure Your Income Is Steady
Before you invest in a home you need to look at your income. How long have you been at your current job, and for the most part is it stable with no chances of going anywhere soon? The last thing you want to do is sign the paperwork for your house only to lose your job the next week.
If you’re not single you will want to look at both the incomes coming into the home. This could help with some cushioning in case one of you does lose your job or find yourself making less money than originally calculated when you bought your home.