10 Radical Actions To Take Before Buying A House

0
74

10 Radical Actions To Take Before Buying A House

Be an unusual house buyer; the best kind

-Advertisement-

Photo Credit: MART PRODUCTION
“Let’s buy a house!” says the average American that can “afford” it. Yet, they have no savings, no second income, no emergency fund, and they’re off track with retirement. Moreover, they got a car notes, student loans, and credit card debt. Come on, folks.

10 Radical Actions To Take Before Buying A House

Before you sign that 30-year fixed mortgage, have at least five years’ worth of income saved to pay on your mortgage if you lose all income sources. If you have five years’ worth of mortgage saved, you will be able to chill for a while, and you will have five years to sell that house, so it’s not a financial burden.

Earn enough income to pay an extra $1,000 — $2,000 a month on your mortgage to get it paid off in less than 30 years and get a second property to rent out and build passive income. Plus, who wants to pay 3–5 times what they originally paid for the house after 30 years? Not me. What a rip-off.

Ensure you have at least one consistent passive income source that doesn’t require much work and can cover a reasonable percentage of your mortgage to add some buffer if things go south.

Build up excellent credit so you can get the best interest rate. Pay all of your bills on time. Don’t apply for new credit before starting the new home application process.

Pay off all of your debts (e.g., credit card debt, car loans, personal loans, student loans). The lower your debt-to-income ratio is the better rate you’ll get for your mortgage, and the more house you can buy (but most of us don’t require huge homes as society tries to make us believe).

Buy only what you need. Do you need six bedrooms for two people? Probably not. Do you need a yard that’s as big as a farm? Probably not.
Do you need six bathrooms? Probably not. Do you need three garages? Probably not. Excess = more financial obligations.

Ensure you can afford your mortgage on your own. Don’t rely on someone else’s income to help you pay your mortgage. Afford that sh*t on your own, so you’re always good if you lose someone else’s income.

Increase your income before buying a house to increase your savings, emergency fund, and down payment on your new home. Increasing your income will also help you feel more confident and comfortable about your monthly mortgage payment.

If you can’t get a reasonable interest rate at first, aggressively build up your credit profile and continue investing and saving so you can refinance your mortgage at a better rate down the line after you purchase your home.

Try to go with a credit union if you can’t make a sizeable down payment, or shop around for a mortgage lender that will waive PMI (and other house fees) so that you can save every month on that fee.

CONTRIBUTED BY Destiny S. Harris

Read More: Three Financial Mistakes That Young People Make

We do everything possible to supply quality information for readers day in, day out and we are committed to keep doing this. Your kind donation will help our continuous research efforts.

LEAVE A REPLY

Please enter your comment!
Please enter your name here