5 Things to Consider Before Attempting a Home Purchase

Before you start looking, before you call your local real estate agent, consider these 5 things first. They will allow you to waltz into your bank and get a loan with a fixed rate.

1. Find a job you can cope with. Where there are opportunities and the ability to move up within the company; better pay, benefits in the form of health insurance, retirement plan and vacation time are a must with today's economy. It should also be a company you feel you can stick with for at least five years. Even if you have to move to accomodate the need for a better job, your first home is worth it!

2. Length of time at your current address is also a determining factor in the process. Again, 5 years is a good length of time, but you could probably get away with 3 years. Length of time within your employment of choice and time at present address show stability, responsibility and the ability to pay your bills.

3. Pay off all your debt. Get your credit report from all four credit reporting agencies. Pay off any and all debt, no matter who you owe it to. Even if it's not on your credit report, if you consciously owe someone money, PAY THEM!!!

4. DO NOT buy a brand new car!! It will not impress anyone into giving you a home loan. What a new car screams is, "My owner has a huge monthly car payment, AND full coverage insurance to pay!! For the next FIVE YEARS!!!" Find a newer used car that you can pay cash for. And avoid car lots. Spend some time looking in the newspaper or Auto Trader Magazine. Find a private owner. You will find your best deals for good used cars that way, and you won't pay any interest. Also, rethink that car purchase. Do you really need a new car?

5. Get some money in savings! First of all, you will have upfront expenses and a down payment to make. Secondly, you want to have some fall back money, in case of emergencies or in the event of job loss, illness, or death. You need to have at least $10,000 in savings. $5,000 will pay most of your down payment, but you will need at least $6,000 to cover everything. At least. $15,000 in savings is even more ideal and not impossible. That will ensure you have plenty of money to cover your down payment and other costs of purchasing a home, plus a nice cushion to fall back on. You can easily save money by narrowing things down to necessities. When you go shopping, think about whether the things you buy are things you need or are they wants? You can always get things you want later. Don't run out and spend your tax returns on some new, big purchase. Pay the things you need to pay, like that old debt that will come between you and the purchase of your first home. Put the rest into savings.

It sounds like a lot and a long road to buying your first home, but it isn't. You can attain financial freedom and have money in savings in 5 to 10 years if you really want it bad enough. There is some sacrifice and a lot of resistance to spending money frivolously, but when you really want to stop renting and start owning, it is all very worth it in the end! I now own 2 acres and a 1600 square foot home because of the above efforts and diligence toward my finances. Let me also say, once debt free, you won't ever see it any other way!