5 Must Dos: Before You Buy
Thanks to continued near record low interest rates, the outlook for the housing market remains optimistic. If you’re one of the millions considering homeownership, there are steps you should take to ensure your American dream doesn’t turn into a nightmare.
Financial experts, such as financial consultant and television personality, Suze Orman, say it’s imperative to get your financial house in order first. Consider these important steps:
Build an Emergency Fund
According to Orman, a big lesson from the financial crisis of the past few years is how important it is to save for emergencies while you have consistent employment. A 2012 bankrate.com survey found that 28 percent of respondents had no money set aside, and about 20 percent had less than three months of living expenses saved. A good rule of thumb is to have enough savings to survive six to eight months or more without an income.
Save for Retirement
To retire with confidence, you’ll need adequate income, and it’s up to you to make it happen and last for the rest of your life. As longevity increases, savings will become critical. Even combined with Social Security, you will have to take into consideration medical bills and the lifestyle you wish to maintain. Don’t skimp on retirement.
Live on Less
The next time you receive a raise, immediately save two-thirds of it and increase your 401(k) or IRA contribution instead. You won’t miss the money if you never see it in your paycheck.
It’s crucial to be realistic about your current financial obligations and know if you are in a position to borrow. Getting pre-qualified will allow you to see what you can realistically afford. Borrow only what you need to support a lifestyle within your means. Homeownership can add to your long-term happiness, but only if you are financially secure.
Resolve Credit Issues
Tough economic times can create credit complications. Pardee Homes’ HomewardBound program often can help homebuyers enhance or repair their credit so they can get into a new home.
Not sure if you can qualify for the home of your dreams? Talk with one of our New Home Specialists about getting on the path to homeownership.