Buying a home is the largest purchase most people make in their lifetime. According to the National Association of Realtors, about 63% of all Americans are homeowners.Still many Americans don’t realize that homeownership is within their grasp. Home ownership is one of the best ways to realize the American dream. There are some disadvantages to owning a house, butÂ in my opinionÂ the advantages far outweigh the risk and efforts required in obtaining one’s own house. Hereâ€™s a list of the advantage of owning your own home: pride of ownership, borrowing power, appreciation, stability, mortgage interest deductions, property tax deductions, capital gain exclusion, building equity, and equity loans. The biggest advantage is that it can create a security blanket for your family and you can pass your home down to your children, and their children, creating security for generations to come
Â My own personal story is evidence as to why I believe home ownership gives you an advantage in life. At age twenty three I purchased my first home for a whopping $55,000. I lived in that house for over 10 years and during that time I took advantage of most of the benefits that comes with home ownership. My wife and I thought the time was right to move into a bigger house, because the house we lived in at that time was too small to raise a family. In late 2005 when the real estate market was changing we soldÂ thatÂ house for $280,000; that was a $225,000 profit in 10 years! One of the best part was that after living there for 10 years we were only paying a couple of hundred dollars a month on mortgage payments. We took the profit we received from the sale along with some savings we had and paid down our next mortgage. Now we live in a better neighborhood, bigger house, which is structurally sounder and our children will have more room to grow. I truly believe that being where Iâ€™m at today would never have been possible without owning that house. I encourage anyone I can to purchase instead of renting and the soonerÂ you get started, the soonerÂ you can reap the benefits.
Â To find out if you are ready to buy a house, Iâ€™ve written down some pre-qualifying questions that you can ask yourself:
Am I ready to buy a house?
1.Â Have I been with the same employer for the past two years? A steady source of incomeÂ superceeds the two year employment requirements.Â
2.Â Have I been self-employed for the past two years?
3.Â Do I have a credit history?
4.Â Do I have 3% to 6% of the homes purchase price saved for the closing cost?
5.Â Do I have at least 5% for down payment?
Â If you answered, â€œyesâ€ to all the questions above than you are ready
Â Where do I begin?
Â Start by checking your credit history for errors that can negatively affect your credit score. You can get your FREE credit report once every twelve months from each of the three major credit companies by going to www.annualcreditreport.com
How much can I afford?
To answer that question youâ€™ll have to sit down with a mortgage lender. Before you do so, I suggest you purchase your FICO/Beacon score from the three major credit companies which are:
Bring a copy of your FICO score in with you when you sit down with a mortgage lender to get pre-approved for a loan. The Mortgage Banker/Broker will be able to help you figure out how much house you can afford. Make sure that you receive a pre-approval letter from the Banker/Broker before you leave, youâ€™ll need it when you submit an offer.
How to find a real estate agent?
First, I would suggest to call family and friends to see if any of them knows or have used a good Realtor recently. Other than the obvious which is experience, I would look for a Realtor that you can trust and can easily communicate with.
A good place to interview agents isÂ to stop-byÂ their open house. Donâ€™t let them know theyâ€™re being interviewed. Check your local newspaper on week-ends for the location of open houses in your area.
I wish you a good hunting trip!