Buying A New Home

There are many things to consider when purchasing a new home. Too often individuals seem to rely on what a mortgage broker tells them what they can afford when buying a home. There are some serious considerations to think about regardless as to what you here from everyone else. The thing that I have noticed among many of my young clients is that they get into the largest house possible without consideration as to the over all costs that will be required to be paid. According to the American institute of Certified Public Accountants you should make up a pretend budget as to what your total home costs are going to be. This will allow you to know if you can actually afford the home you are looking to purchase. It is a good idea to save for a 20% down payment. This will give you better loan terms. You also want to make sure that your income is relatively stable. At Prosper, we recommend that you have at least $1,500 stashed away as a basic emergency fund. If your debts exceed 38% of your gross adjusted income, then you will need to reduce this so that your housing is below that figure, otherwise you will not be able to afford the house. You should also make sure that your income is relatively consistent. Fluctuating income is a sure sign that renting is best for you for the time being. You should also check your credit score and report at least once a year. Pull only from one reporting bureau at a time. You should also understand that purchasing a home is a long term commitment. It takes at least five years for you to recover any closing costs on the purchase. All these steps will help you purchase a home that you can afford and will not deplete your resources.