Before clicking through pages of online listings or falling in love with your dream home, do a serious audit of your finances. You need to be prepared for both the purchase, and the ongoing expenses of a home. The outcome of this audit will tell you whether you’re ready to take this big step, or if you need to do more to prepare.
Follow these steps:
1. Look at your savings. You'll need 3-6 months of living expenses saved in case of an emergency.
2. Budget for considerable up-front costs, including the down payment and closing costs. You need money put away for these. Lenders will require it.
3. Do your homework on how much property tax, utilities, & condo maintenance fees (if purchasing a condo) will be each month. Ask a friend or parent that owns a similar size property as an idea of what you'll be spending.
One of the biggest challenges is keeping your savings in an accessible, relatively safe vehicle that still provides a return so that you’re keeping up with inflation.
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