Getting Started: Buying a Home
It’s the biggest financial decision of your life, so how do you know if you’re making the best choices for you?
Am I ready to buy a house?
You’ll need good finances, meaning a steady income, good credit, and money saved for a down payment. You’ll also need to be able to commit to owning the house for three to five years—after all a house is an investment. You should also be prepared to take on the responsibilities of owning a home—you won’t be able to call your landlord to fix something that goes wrong.
- 5 Questions to Ask Before Starting a New Home Search
- Buying Your First Home? Don't Make These Mistakes
- I want to Buy a Home--Where Do I Even Start
How much do I need to save for a down payment?
The general rule of thumb is 20 percent. It sounds like a lot, but luckily, there are programs and other options—like private mortgage insurance and FHA loans—to help you get by with less. It’s usually better to have a larger down payment, but not having 20 percent doesn’t mean you can’t buy a home.
- Ask YNAB: Five Ways a Budget Can Help You Save for a Down Payment
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How much house can I afford?
Most loan calculators and banks are going to look at your monthly income and your debts—like your student loans and auto loans. But don’t forget to factor in your monthly spending and saving habits. Remember, if you’re approved for a monthly payment you’re not comfortable with, you can always buy something less expensive.
- How Much House Can I Afford Calculator
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- The Complete Guide to Buying a Home When You Have Student Loan Debt
How do I get a mortgage and make sure it has the lowest rate?
Most banks offer mortgage loans. Start with your bank, but remember to take about a month to shop around for the best mortgage offer before you decide on a lender. The best way increase your chance of getting a great mortgage rate is to have excellent credit. If your credit isn’t very good, there are things you can do to help improve it.
- How to Shop Around for a Mortgage
- Your Road to Better Credit and Qualifying for a Mortgage
- How to Negotiate With Your Mortgage Lender
What type of mortgage is right for me?
While most people opt for a conventional mortgage, there are a lot of different types. You’ll need to look at how much you have for a down payment, whether you’re eligible for any special programs (like a VA loan), where you plan on buying a home, and how long you plan on being in your house.
- What Types of Mortgages Are Available?
- The Complete List of First-time Buyer Loan Programs
- Mortgages for Veterans
Still have questions? We regularly add new posts to our site, so keep checking back. Or you can ask us directly on social media!