How to determine if you can afford your first home
Investing in your first home requires that you go through a careful process that will end in a beautiful reward. Before putting down the money, you need to make sure that you will afford the entire process. When you put your expectations alongside the amount of money you can manage to raise, it will help you determine your price range.
Here is what you need to consider;
Your income vs your first home
Your income will determine how much you can put into your first home investment. Any money you have coming in will go a long way in helping you save up. You may not have the deposit to put in right now, but saving money from your income will set you on that path.
Your expenses and debt
As you plan to put money aside towards buying a home, you must consider your expenses and debts against your income. Your expenses include current housing, food, clothing, school fees, and healthcare. You might have to make some sacrifices along the way to enable you afford the deposit and consequent payments.
Debt payment is obviously a priority. You must first ensure that you can comfortably pay any debt, meet your expenses, and still put money aside for property investment.
You can explore credit options to help you achieve your investment dream. Options can include a private lender, bank or Sacco. Ensure that you carefully look into the terms of the credit you will be acquiring. Look for good interest rates and friendly terms of payment. Ultimately, you do not want to get started on a process that will be too burdensome.
When it comes time for you to make the first down payment for a home, there are upfront costs you will incur. These may include appraisal fees, inspection fees, survey costs, title search fees, and mortgage processing fees.
If you are working with a property investment company, ensure that they provide the full range of upfront costs. You can then determine whether you are ready to dive in or perhaps you need to wait a little longer to save up more money.
Buying your first home or property should bring you a sense of accomplishment. Before you dive in, prepare adequately for the process so that you will not have to stop or struggle mid-way. You may need to wait a little longer to get your finances in line. As long as you are working hard towards your dream, you will eventually get to where you desire to be.
Photo by Brian Babb on Unsplash