3 elements you must have in your financial life to buy a home

2021 might be the year to purchase a home. With the combination of ultra-low interest rates buying a home could absolutely be something within your reach. Timing the market not a good idea, buying a home when your finances and cash and credit and income support generally makes sense if you have a buy and long-term hold strategy in place.

So to purchase a house you need to have income that’s going to support a mortgage payment. It’s all relative to the area, for example, if you live in Sonoma County, California where the average home price is about $650,000 you need to have at least $100,000 of income.

You also need to have at least a good credit score ideally 680 + range is a good place to start it could be lower depending on your income for example if your income is really strong, but your credit score is low that’s ok as long as you have a down payment that’s ok, but in order to be successful on buying a house you really need to have a down payment somewhere between $15 and $20k neighborhood. This parlays to about three and a half percent down on an FHA 30-year fixed. If you have those elements in place and your debts are relatively low you’re on your right track. So let’s just say for whatever reason that you don’t have quite that level of income and you are in a higher price housing area what do you do?

Apply for a mortgage, and get a home buying plan from the lender.

Look for a higher-paying job, look for the possibility of a cosigner or align your budget and payment expectations to what you can afford. Being a first-time home buyer there are options there’s nothing saying as a first-time home buyer that you must go out and buy a half a million-dollar house more right out of the gate as your first home. If you can do that more power to you, but don’t think like that. Your real estate process ought to be thought of in stages crawl-walk-run.

Maybe you buy a condo live it for a couple of years gain some equity and some appreciation based on Market forces then turn around and buy a mid-tier home? Buy what you can afford. Get your foot in the door, get the tax benefits and all the appreciation that comes with owning a house, those things can be a wonderful platform to helping you and your family get into a house versus trying to save the thousands of dollars a month that it otherwise might take trying to do it a hundred percent on your own.  Something to think about when determining when the time makes sense to buy a house is for you and your family.

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