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One of the biggest leaps in life is buying a home. Both the consideration of buying a home and the home buying process may be quite stressful for future homeowners. It is essential to consider several variables before buying a home in order to make the leap possible. Here are a few items to consider.

Assess Credit

This should ideally be the first step. In order for a future homeowner to be able to buy a home, they need a healthy financial record. The Consumer Financial Protection Bureau (CFPB) outlines that the first thing a person should do is to check their credit. Mortgage lenders need to check the credit of a potential buyer in order to assess if the buyer is capable to pay a mortgage over time. By checking one's credit, the buyer may see their general financial health or any abnormalities in their record.

Down Payment

The down payment is another variable the CFPB warns that a potential homeowner needs to consider. The CFPB recommends that most home buyers put down 20 percent of a home's value to the mortgage lender. However, the CFPB even admits that many buyers do not have 20 percent of a home's price for a down payment. In fact, the CFPB noted that 3 million buyers in 2017 only put down 10 percent for a down payment. Whether it is 10 or 20 percent, a potential home buyer needs to understand that they need a large amount of money up front to purchase a home.

Banking Trends and Mortgage Shopping

This is the part in the process where one can shop around and watch trends in the market before deciding if its the right moment to buy a home. The government enterprise of Freddie Mac informs the public that mortgages tend to come as fixed-rate or adjustable rate for the interests rates and then mortgages come as 15-year or 30-year in lengths of time. These variables can greatly impact how much a monthly mortgage will cost, especially the interest rate. That is why these institutions ask the consumer to shop around with different mortgage lenders to see how the lenders package plans and the rates with them.

Consider Other Costs

To purchase a home, there will be more than just the down payment and monthly mortgage costs. A potential homeowner has to consider the money they will need to pay a real estate agent, inspection costs, the closing costs on the home, any initial repairs that are needed on the home, and most importantly, the insurance and taxes on a home. Taxes will play a role in how much the municipality will assess the house for and be a long term cost with the home ownership. Insurance also plays a long term role but that tends to be a market-based variable unlike taxes. Cheap renters insurance is available at competitive market rates in most states. However, there are variables in relation to the house that can impact how much the insurance will cost. For example, the Department of Financial Services for the State of New York cites variables like the age of the home and its proximity to fire services that will affect the insurance coverage. Knowing that the home buying process is more than down payments and a monthly mortgage is a crucial reality to understand.

Location

Finally, buying a home is more than just buying a single unit. Its giving a commitment to a specific street, neighborhood, municipality, and region for a long period of time. Taking into account where one wants to live is probably the most important step to buying a home.

Conclusion

A lot of soul searching and financial analysis should be done before considering buying a home. Taking the time and doing some research will help a potential homeowner make the appropriate decisions before starting the home buying process.

Carol also is passionate about health and fitness and stays active on her free time. She enjoys hikes and participates in multiple marathons. She loves learning to new tips on health and enjoys sharing her knowledge with her readers