How to Know When You Can Finally Afford to Buy a Home

If you have always dreamed of owning your own home, you might be afraid that you can't afford one. 

Even with the right planning and months or years of saving, it can be a big step that doesn't always seem attainable. 

However, there are a few signs that you can look for to determine if you truly can afford to purchase a house. These are a few signs that your bank account can handle a mortgage payment.

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You Have a Down Payment Saved Up

First and foremost, you will probably be required to save up a down payment to purchase your home. In many cases, you will need to have at least 20 percent of the price of the home in savings. 

Even if you don't have to pay this much, having saved up a down payment is a great first step. After you have saved for a down payment, consider allocating that monthly savings amount to something else like closing costs. 

Once if you have reached a savings goal, continue to add that money to your savings so it never feels like a burden, but rather an expected “expense” each month. 

You're Paying All of Your Bills On Time

It's important to be paying all of your bills on time before you think about purchasing a home. Not only do you have to worry about your credit rating, but you don't want to fall even more behind on your bills after purchasing your home. 

If you can comfortably pay all of your bills and have money leftover to save, buying a house could be a good option for you. Ideally, you should be putting money into your savings for a house that equals what a monthly payment would be. 

This will allow you to see how much money you have leftover if you really did have a mortgage payment. 

You Qualify for a Mortgage

Before you can purchase a home, you have to ensure that you qualify for a mortgage. Luckily, you can find loans which can make home ownership easier than you think. 

For example, if you are a veteran or active service member, you can purchase a home with a VA loan, which requires no money down. Take a look at Low Va Rates to find out how you can afford to buy a home. 

You Have an Emergency Fund in Savings

It's important to have an emergency fund in your savings account. Then, if something goes wrong with your home, you will have the money that you need to cover the expenses. Your emergency fund can also help you if you fall behind on your mortgage due to unforeseen financial emergencies. 

Your Income is Steady

Your income should be steady, and you should know how much money you will bring in every month. If your income is unreliable, then you will need to be able to make your mortgage payment with the smallest amount of money that you receive in a month. 

This is a good indicator of how much you can really afford for a new home. 

You've Had the Same Job for a While

Your mortgage lender will probably want to know that you have had your job for a while. Different lenders have different requirements, but you will probably need to have the same job for at least one year before you can look into a mortgage.

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Purchasing your own home can be a wonderful milestone. Although you might be afraid that you can't afford to purchase a home of your own, these are a few signs that it is finally time. 

If these things apply to you, then you can schedule an appointment with a banker to find out more about qualifying for financing and purchasing your first house.

What to Do and Not Do When Selling Your Home

In the past couple years, real estate values have been the subject of many debates and news stories. With a down market, many home sellers are finding it hard to get the price they want and many are finding it hard to get a return on their investment. This doesn't mean it is not possible to get your asking price and make a little profit. There are right and wrong ways to sell a home, you just need to understand both sides.

Selling Solo or Through an Agent?

"I can sell my home myself" is often the first words of a bad deal. Many homeowners decide to go at it alone, trying to save money on the sale. For many this is the single mistake that keeps their home on the market and often results in a loss in profits. The average agent's cut is 2.5-3%. This can actually be negotiated down due to the competition real estate agents have from discount brokers and flat-rate services. Additionally, the benefits of an agent's years of expertise may yield a higher selling price, cancelling out the commission altogether.
Pre-Inspect and Repair

Before you sell a car, you would get the broken headlight fixed, or deduct the amount of the repair from the asking price. A home is no different. If a buyer sees a minor or major repair that is needed, they will negotiate you down from your asking price to cover the cost of the repair. Have your house inspected and make any repairs that will drive the price down. You want to sell your buyers on the features, stability, and possibilities of your house becoming their dream home, this is hard to do if you have leaking faucets and bad wiring.

Pricing and Value

If you have been following the real estate market or even talking with your neighbors, you know the market is down and prices have fallen. When you decide to sell your home, you have to keep the price within the current market and price it similar to other homes for sale in your neighborhood, even if you feel your home is worth more. Pricing too high will slow your sale and often result in a desperate sale later. Remove your emotional attachment and price your home at what the market deems is the true value.

Clean, Stage, and Prepare to Leave

One of the biggest mistakes made by first time home sellers is the lack of preparation. When you are selling your home, you are selling the structure, not the clutter. Remove as much as you can so your prospective buyers can get a good look at the floors, walls, and surfaces of the home. Your best tool for selling your home is your buyer's imagination of what the home can become when they move in, not what it looks like as you live in it.

Take Compelling Photos

Whether you are selling solo or using an agent, a picture is still worth a thousand words. You can easily find listings with blurry, low quality pictures of the property, and you will more than likely see those years from now as the house stays on the market. Be sure to take high quality photos of the outside, landscape, inside, and the unique features of the home to catch the buyer's attention and make them want to tour the home.

Selling your home is a big decision filled with planning, preparation and care. Take your time to sell the beauty of your home, research the local market value, and give your buyer the experience they expect when they visit their prospective new home. You will find the smallest details can result in the largest sales.

Sheila Madison is a property blogger who advises both home owners and real estate agents on the proper way to prep a home for quick sale.