Am I ready to buy a property?

MAR 26, 2019

As time passes, we set goals for ourselves that can go from buying a first car, to achieving a college degree, to buying the house of our dreams. But sometimes we’re so stressed about making that dream come true that we can make the wrong decisions.

For example, you buy the house you so wanted, but now you have no money left over to face a financial emergency, go on vacation, or simply treat yourself. So, before deciding to buy, you should know certain things.

What should I ask myself before buying a property? How much money is enough?

You must be able to show that you have a monthly salary or fixed income to pay all your bills, in addition to the mortgage loan. The latter must not exceed 30% of your gross total salary. For example, if you receive $2,500 per month, your monthly mortgage payment should not exceed $750. It is good to do a prequalification so that you have a clear idea of the range of value for which you could aspire according to your income and economic commitments.

What are your financial commitments? Prepare a table where you write and add all the accounts you pay each month, such as credit cards, auto loans, water, electricity, cell phone, gasoline and health insurance, among others. When adding the accounts, you will see how much of your income you can allocate for a property.

How much do you spend on extra things? For a month or two, write down day after day how you spend the money you have left after paying your bills and basic needs. Whether it is small or big spending, write it down. If you craved an ice cream or a chocolate candy, you bought a pair of shoes, went to that concert that you were anticipating so much, or if you had to buy a birthday present, write it down. Remember that there will be months with additional expenses, such as the holiday season and back-to-school. This exercise will help you determine how much money you need for extra things.

Have you saved enough? Experts recommend having a reserve to cover all your accounts for at least three months. For example, if you earn $2,500 per month, you must have a minimum of $7,500. Finance experts recommend the 50-30-20 rule, with which 50% of your monthly income is used to cover accounts and basic needs, while 30% goes to extra expenses and 20% goes directly to a savings account. Remember that if you decide to make a financed purchase, you should have savings for the down payment and closing costs; as well as for incidentals, furniture, fixtures, etc.

As you can see, having savings and knowing how to distribute your money among your accounts and needs is essential to take the big step of buying and enjoying the home of your dreams. In deShow you find the property you are looking for. Contact one of our representatives for guidance or call us at 787-489-0990.