With the new tax credit provided by HERA for first-time homebuyers. It is a great time for the first-time buyers to get in the market. FHA and VA loans are a great options and have guidelines in place that allow for the limited credit profiles of buyers fresh out of school.Now a great idea that I have heard several times over the last month, is for the inexperienced buyer to experiment with their budget before they actually commit to a mortgage. This is for the person who is currently living at home with their parents with no housing expense or knows that the mortgage payment and monthly expenses will dramatically jump when they get their our place.
What they should do is calculate what the mortgage payment and utilities are going to run in their new home. Then put that amount in savings each month and see if they can live off the remainder of their income. If they can for at least six months and can still maintain the lifestyle they want to live, then they are ready to go house hunting. If not, they have saved some money and did not bury themselves in debt and can continue renting and saving until they are ready.
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